How to protect your loved ones when you die

Complete estate plan: Part 2

In my previous article, I discussed wills, which are the first document in a complete estate plan.

Contrary to popular belief, a will does not provide any legal authority to handle your affairs while you are alive. So, to provide authority for individuals to manage your affairs while you are still alive, two other documents are needed for a complete estate plan. These documents are the power of attorney and the representation agreement.

The power of attorney, often called a POA, grants an individual or individuals authority over your financial affairs. Unlike a will, which only applies if you are dead, a POA applies while you are alive. It also applies if you are not incapacitated, unless you specify otherwise.

We typically advise clients to not restrict a POA to incapacity, as it adds a layer of complexity for the individual named on the POA. POA’s can be abused, so it is important to choose individuals you trust, and if there are multiple individuals, you need to consider whether they can work well together.

The POA is important because your loved ones, including your spouse and children, have no authority over your financial affairs without it. For example, they would be unable to sell your home to assist with the costs of care, or to access your bank accounts or investments that are held solely in your name.

The representation agreement grants an individual or individuals authority over decisions relating to your health and well being. Like a POA, it only applies while you are alive and may apply if you are not incapacitated. The authority under a representation agreement is comprehensive and can include health decisions, well-being decisions and authority to access records. It also includes an end-of-life provision, which prevents medical professionals from administering heroic measures in the event there is limited or no prospect of recovery. Representation agreements also allow doctors to remove you from life-support if you have a limited, or no, prospect of recovery. Otherwise, they must keep you alive in a vegetative state.

Preparing the power of attorney and representation agreements in a timely manner is important. If you put off preparing these documents and lose capacity, they can no longer be prepared as you must have capacity to sign these documents.

I have dealt with many cases where individuals did not prepare these documents prior to losing capacity, and then tragedy struck, such as car accident, stroke or dementia. In those cases, the family was left scrambling to figure out how to deal with their loved one’s finances, health decisions and bills. The solution at that point is a very time-consuming and costly petition to the court known as “committeeship.”

If you have any questions, please feel free to reach out to me at 778-478-8555 or by email at [email protected]. You can also view my firm's website and profile here.

The information provided in this article does not, and is not intended to, constitute legal advice. All information and content is for general information purposes only.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

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About the Author

Wes Forgione is a Partner with Montgomery Miles and Stone Law Firm located in Kelowna, BC. He was born and raised in Toronto and attended Osgoode Hall Law School prior to moving to Kelowna in 2013.

Wes practices in the areas of estate planning, real estate, and corporate/commercial law. His clients include families who need to organize their affairs, first time and experienced home buyers and developers, and new or established business owners. In this capacity, he often acts as “quarter back” for his clients and provides real time strategic and risk management advice.

Wes is committed to professional excellence. His approachability distinguishes him from other lawyers' and he prides himself on avoiding the artificial formality lawyers are known. He provides expert advice in a friendly and efficient manner. 

In the community, he regularly presents for mortgage brokers and realtors. He also participates in the Free Wills Month for charity.

In his spare time, Wes enjoys spending time with his beautiful wife, his babies Henry and Archie , and sheltie in the great outdoors that Kelowna has to offer. He is also an avid fitness enthusiast, and trains Muay Thai with an aim to compete eventually.

You can contact Wes at 778-478-8555 or by email at [email protected].

The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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