Do I Really Need a Power of Attorney?

December 1, 2018


The following article was written by Joe Basque and edited by Lisa Holmgren, a lawyer with Stephens & Company Law Corporation who practices in the area of estate planning. We also interviewed Lisa for the article and asked her to provide some insight.

What is a Power of Attorney (POA)?

A power of attorney is a legal document that an individual uses to appoint another person or entity, called the attorney, to make financial and legal decisions on their behalf. The authority granted can be broad or very specific, perhaps only relating to one specific task you’d like your POA to perform.  

It’s important to keep in mind that the authority granted to a POA is valid only while the originator is alive, with authority immediately ceasing upon death.  This is not to be confused with an executor or executrix, who only controls and disperses your assets according to your Will once you’ve passed away.  Although your attorney and executor/executrix can be the same person, only your attorney can act while you are alive and only your executor can act after your death.

Types of Power of Attorney (POA)

There are three main types of POA documents:


Lisa Holmgren, Lawyer

Stevens & Company Law Corp.
Contact Information

General Power of Attorney:  A General POA comes into force immediately upon all parties signing the POA document. This means your attorney has immediate authority to act on your behalf without the need for incapacitation.  Should the originator of the General POA become incapacitated, authority immediately ceases. This type of POA is not very common. 

Enduring Power of Attorney:  This is more common.  The authority of the POA remains valid through incapacitation.  So long as the originator of the POA is alive and hasn’t named another person, the POA is always in force.

Springing Power of Attorney: Authority only begins after incapacitation.  A springing POA provides instruction on what is required to establish incapacitation, such as a doctor’s note, before the authority is granted.

Determining the best option for you will really depend on your personal circumstances, and we recommend the advice of an estate planning professional.


Roles and Responsibilities of your Attorney:

In accepting the role, your attorney is obligated to act in your best interest, with no thought of personal gain.   They are tasked with the same responsibilities as the individual they serve; making sure the bills are paid, debts are serviced, investments are managed, taxes are paid, etc.

An attorney can have a lot of power over an individual’s assets, and therefore can be held personally liable for negligent or improper behavior.  For that reason, it is imperative that the attorney be diligent in their actions and keep detailed records and receipts.  POA’s should never co-mingle their own assets with the assets of those whom they serve as attorney.

One important restriction regarding your attorney’s authority is that they cannot change beneficiary designations on insurance policies nor alter your Will.

What happens if I’m incapacitated and don’t have a Power of Attorney in place?

“It can certainly create a lot of unnecessary difficulties for family or friends” says Holmgren. “In BC, once you are deemed incapacitated, you can lose decision-making power with regard to your property.  Without a POA in place, the next step is to have the courts appoint an individual to take control of the assets, known as a committee.”  

A committee is essentially a court-appointed POA.  The costs of applying for committeeship could be in the range of several thousand dollars.  It usually involves getting affidavits from two separate doctors, having to attend court, and possibly having the Office of the Public Guardian and Trustee of BC involved. The real downside, besides the cost, is the time involved.

According to Holmgren, the process could take several months.  There’s also no guarantee that the court will agree to name the individual applying for committeeship if they feel someone else is more appropriate. It is an unknown at a time when there is probably enough stress in the household.

“If there’s incapacitation and quick financial decisions need to be made, such as selling a property, an application for committeeship is going to delay quick action.  I certainly recommend proactive planning and getting a POA document in place, as the last thing you probably want is to burden your family or friends.”


Do we really need a POA if all our assets are jointly held?

“It is still advisable,” says Holmgren.  “Aside from individual assets like RRSP and TFSA accounts, even jointly held assets may not circumvent the problem of control when someone is incapacitated.”

“For instance, if you need to sell the home and it is registered in joint names, the incapacitated individual cannot sign the land title transfer.  Without a power of attorney or court appointed committee, there is no legal consent and the property cannot be sold.  This one often surprises people.”

According to Holmgren, a similar problem could arise if one needed to make changes to an existing mortgage, or perhaps borrow against the property.  The lender could potentially refuse a loan without the signatures of both joint owners. “There are other examples, but these are some of the more common ones I see,” says Holmgren.


Is having a Power of Attorney crucial?

“I always think it’s advisable to have the document in place,” states Holmgren.  “However, two common scenarios I can think of where it would be really important to get it done would be prior to a major surgery, and a household where one spouse works out of town a lot.  In the case of the out-of-town spouse, a POA document makes it easier for the local spouse to deal with day to day finances.”


What are some important considerations when choosing a power of attorney?

Financial Aptitude
Consider selecting someone who has good financial aptitude.  The duties of a power of attorney can be complex, and someone with good financial skills makes sense.  In addition, its great if you and your POA share a similar attitude towards money.  If you’re conservative in your spending habits, you may want to think twice about selecting your spendthrift nephew.

Assess Willingness
Have an open and honest discussion with the person you’re considering and assess their willingness.  Make sure they understand the role and responsibilities and are willing to take it on.  It’s not uncommon for people to name someone who accepts the appointment out of a sense of obligation but would truly prefer not to.

Choosing someone who is the same age as you or older may seem fine at the time, but as you age, so does your attorney.  Are they going to be capable or willing in the future?    

Choosing someone who lives in the same city as you is most convenient, though not crucial.  With technology, it is becoming easier for a POA to act from a distance, but if your POA is not local, they will need to make at least one trip to visit financial institutions where you hold accounts in person.

Non-Resident POA’s & US Citizens
Be careful about naming a non-resident as your power of attorney in BC.  Some Canadian brokerages have restrictions on non-residents being added as attorneys to the account, with special consideration to US citizens who reside in the US.  

Out of Country Assets
If you have out-of-country assets, such as property in the US, keep in mind that the jurisdiction where the property is held will most likely not recognize a Canadian power of attorney.   It may be advisable to have a separate POA residing in the same jurisdiction as your foreign property.

Family Dynamics
If there’s existing tension in the family, which is not altogether uncommon, minimize your concern by choosing an independent third party, such as a trusted friend or a trust company.

Multiple Attorneys
If you want to name more than one attorney, be mindful of how you want them to act.  Are you granting independent authority or do you want all decisions be made in unison? Also be mindful of their own attitudes to money and how they’ll work together. You probably don’t want to name two people who are polar opposites.  As an alternative, you can always name a primary attorney and a back-up in case the first can’t act.  

Periodic Review
It is recommended that you review and update your power of attorney on a periodic basis, along with your other estate planning documents.  Make sure your POA is still alive and willing to take on the role.



It is no small task choosing a power of attorney. This individual could become responsible for managing your financial affairs.  It’s also no small task for your chosen POA, given that this individual takes on personal risk and most likely already has their own family affairs to manage.  

Don’t, however, let a difficult decision stop you from making it in the first place.  We recommend coordinating with a lawyer who specializes in estate planning to get the advice you need in drafting this important document.

“For relatively minimal costs, you avoid large expenditures down the road, not only in money but in time and effort,” says Holmgren.  “This makes getting a POA document a great investment.”

Joe Basque, BA, CFP® | Financial Planner & Investment Advisor
HollisWealth® a division of Industrial Alliance Securities Inc.


The comments contained herein are general in nature and professional advice regarding an individual’s particular tax or legal position should be obtained in respect of any person’s specific circumstances. This article was written by Joe Basque who an Investment Advisor for HollisWealth, in collaboration Lisa Holmgren, a Lawyer with Stephens & Company Law Corporation. Opinions expressed in this article are those of the author only and do not necessarily reflect those of HollisWealth. 

HollisWealth® is a division of Industrial Alliance Securities Inc., a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.