Nick was in a serious car accident that left him in a coma for some time.  His wife Julia, already emotionally devastated by his condition, discovered she was not able to renegotiate their joint mortgage when it came due for renewal.

Gerald’s mother, Nola, is an 87-year-old senior who still lived in their family home.  She was healthy and spry and took care of her own personal and financial matters.  Every month she trotted off to her bank to pay her utility and other bills and withdraw enough cash for her spending needs.

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Unfortunately, Nola suffered a massive stroke that left her incapacitated and in the hospital.  Gerald was unable to access her money to pay her bills and was not in a good financial position to pay her expenses from his own funds.

Why Power of Attorney is Important

As a banker I had ran across many similar situations, but it really hit home when my mother became really ill as a result of being over medicated by her doctor.

After being transferred from one hospital and medical facility to the next with no noticeable relief in sight, she became seriously depressed.

At one care facility she was asked the standard question about using “extraordinary measures” in case she stopped breathing – a DNR order.  She replied, “I don’t care any more.  I’ve had enough!”  When I objected the nurse replied, “That’s not your call.  You have no authority to make that decision.”  I was horrified.

Having a will is one of the cornerstones of financial and estate planning, yet it is estimated that less than 30% of Canadians have a valid will.

Equally necessary, but less common, are enduring powers of attorney and living wills (or medical directives) which give you the opportunity to specify someone you trust to act on your behalf and make decisions about what should be done with you personally if you are not capable of making the decisions yourself.

It is estimated that less than 10% of Canadians have signed an enduring power-of-attorney document that would protect them in such circumstances.

Related: Caring For Your Elderly Parents

Spouses just assume they will be able to act for each other if such trouble strikes, but it is not true.

For example, you would be unable to renegotiate your mortgage or sell your house, manage your spouse’s RRSP or other investments or property that is held exclusively in their name.

I have a Power of Attorney at the bank

Many people have signed a document at their bank giving their spouse or other relative power of attorney to make financial transactions on their behalf.  These are entirely different from enduring power of attorney forms.

These are used to cover dealings with that particular bank – not affairs in general – and contain a clause that invalidates, and automatically cancels, the power of attorney if the person granting that authority dies or becomes incapacitated.

Take care with documents that you can download from the Internet.  Some banks may not accept any documents that they deem as improperly prepared or seem vague.

Concluding thoughts

It’s important to secure the necessary powers of attorney to manage the personal, financial and health care interests of your elderly parents, even if it is a difficult subject to bring up.

Related: Talking To Your Elderly Parents About Money

Note also that a power of attorney for health care is only valid within the province in which it is executed.

Many couples have assets in their own names.  Take a moment to think about your personal affairs and how they would be handled in case of a medical emergency.

A person can petition the court to be granted the right to act on their spouse or parent’s behalf in case they are incapacitated.  However, the court could find someone else who has also petitioned them more qualified to handle their affairs and it’s within their right to appoint that other person.

With people living longer these days, it’s more and more likely that some form of mental and/or physical incapacity can occur.

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I urge everybody to address the need for these legal documents as soon as possible.


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