What is an Enduring Power of Attorney and Personal Directive?
Many people think that if they have a Will that they are completely covered in the event of illness or injury. Unfortunately, this is not the case. A Will only takes effect after death so it is very important to have an Enduring Power of Attorney and a Personal Directive should you become incapacitated. Most people are surprised to hear that they do not have authority as next of kin to deal with such things as paying bills at their family member’s bank and/or moving their family member to a long-term care facility without first having these documents.
What is an Enduring Power of Attorney?
An Enduring Power of Attorney is a document that you sign to give authority to another person to make decisions regarding your finances and property. For example, under an Enduring Power of Attorney, the person you name can pay bills; cancel services such as phone, cable, internet; and even sell your house. This is especially important if you must be placed in a long term care facility and your house has to be sold in order to pay the rent at the facility.
There are two types of Enduring Powers of Attorney. One is a contingent or “springing” power of attorney that only comes into effect when a medical doctor has declared that you no longer have capacity. Other people have Immediate Enduring Powers of Attorney that come into effect as soon as they are signed by the maker. This type of document is especially helpful in a situation where a senior has mobility issues and running errands is difficult for them. By drafting an Immediate Power of Attorney, a senior can name one or more of their adult children to do the following tasks on their behalf: pay their bills, file personal tax returns, pick up registered mail, make investments, or any other financial matters.
You may have heard of General Powers of Attorney. The difference is that General Powers of Attorney cease to have effect once the person who made them loses mental capacity. An Enduring Power of Attorney continues to be in effect even after someone loses capacity. An Enduring Power of Attorney ceases when a person dies, at which point the Will then takes over.
What is a Personal Directive?
A Personal Directive is a document that allows you to appoint a person to make medical decisions for you if you are alive but mentally incapable. Sometimes this is as a result of stroke, traumatic brain injury, or dementia. Again, many people are surprised to find out that they do not get to make medical decisions for a family member even though they are next of kin.
A Personal Directive is a document that allows the maker to name an agent to make decisions on their behalf. The decisions the agent can make ranges from day-to-day medical decisions, to which facility you may be placed in, to end of life care decisions. For example, you can state in your personal directive if you would like all life support measures to stop if you are brain dead, and if you want pain medication to be administered until you pass.
It is important to name someone that is good at making difficult decisions in a crisis and will honour your last wishes. The Personal Directive will cease to have effect upon death, at which point your Will takes effect and the Personal Representative (Executors) named in your Will have the authority to make funeral arrangements.
Therefore, a good estate plan encompasses not just a Will, but a Power of Attorney and a Personal Directive as well.
If you have questions about drafting these documents, please do not hesitate to contact our office today.