When it comes to planning for the future, many people focus on their Will. While a Will is undoubtedly important, another crucial aspect, often overlooked, is establishing an enduring power of attorney (EPA).
The Importance of Establishing an Enduring Power of Attorney (EPA)
In Alberta an EPA is a legal document that grants someone the authority to make financial and legal decisions on your behalf when you are unable to do so yourself. In this post, we will explore why having an EPA is essential by highlighting its benefits and discussing the potential consequences of not having one.
Financial and Legal Protection during Incapacity or Disability
An EPA is a powerful legal tool that provides financial and legal protection during times when you are unable to make decisions due to incapacity, illness, or other circumstances. Without an EPA in place, your loved ones may be unable to manage your affairs, leading to financial loss or legal complications.
Competent Handling of Finances, Property, and Legal Decisions
However, by appointing a trusted individual as your attorney under the EPA, you can rest assured that your finances, your property, and any legal decisions will be handled competently and in accordance with your wishes.
Retaining Control and Protecting Your Interests
The EPA gives authority to manage bank accounts, pay bills, make investments, and selling or purchasing property on your behalf. With an EPA, you retain control over who will act on your behalf, ensuring that your interests are protected, even if you cannot actively participate in decision-making. You can also include specific requests, or prohibitions if there is some aspect of your estate plan that warrants special attention. For example, if you wish to make sure some land is available to be gifted to your children, you might prohibit your attorney from selling the land.
Consequences of Not Having an EPA
In the absence of an enduring power of attorney, the consequences can be significant. If you become incapacitated or unable to make decisions, and there is no EPA in place, your loved ones will need to apply for trusteeship through the Alberta courts. Trusteeship is a legal process in which someone is appointed by the court to manage your financial and legal affair. Trusteeship essentially offers the same power to the trustee that your attorney would have.
Challenges of Applying for Trusteeship
Unfortunately, the application for trusteeship can be time-consuming, costly, and emotionally challenging for your loved ones. It requires gathering evidence, attending court hearings, and demonstrating to the court that the proposed trustee is suitable and capable of managing your affairs. This process can lead to delays in decision-making, potential conflicts among family members, and additional stress during an already difficult time. Further, the trustee must abide only by the default instructions that all trustees operate under, and they may not, without further court orders, act out of the ordinary even if they knew it would be what you wanted.
Risks of Court-Appointed Trustees
Even worse, the court-appointed trustee may not have a personal connection with you or be familiar with your preferences and values. This lack of familiarity may result in decisions being made that do not align with your wishes. By not having an EPA, you relinquish control over who will manage your affairs, potentially leaving it in the hands of someone who lacks the necessary knowledge or understanding of your specific circumstances or perhaps even being an individual, you would not have wanted to have a say in your care.
Avoiding Legal Conflicts and Disputes
Establishing an enduring power of attorney helps avoid legal conflicts that can arise when decision-making authority is unclear. Without a designated attorney, family members may have different opinions regarding who should be responsible for managing your affairs. Disputes can arise, potentially leading to court battles, strained relationships, and delays in important matters.
Delays, Strained Relationships, and Important Matters
By having an EPA, you eliminate ambiguity and potential conflicts as the designated attorney is legally empowered to make decisions on your behalf.
A well drafted EPA provides clear instructions for your attorney regarding your preferences and values, guiding them in their decision-making process. This helps avoid misunderstandings and ensures that your wishes are respected and followed, even in difficult circumstances.
Respecting Your Wishes and Preferences
One of the significant advantages of an enduring power of attorney is its flexibility. You can determine when the EPA comes into effect, such as upon a specific event or incapacity. This ensures that your chosen attorney will step in only when necessary, maintaining your independence as long as possible or even coming into effect early so that you can receive the assistance you need immediately.
Additionally, an EPA allows you to appoint multiple attorneys, providing an extra layer of protection and ensuring continuity in decision-making. In situations where one attorney is unable or unwilling to act, a substitute attorney can seamlessly take over, avoiding disruptions and ensuring the smooth management of your affairs.
Seek Professional Guidance
In Alberta, an enduring power of attorney is an essential component of comprehensive estate planning. By appointing a trusted individual to act on your behalf in financial and legal matters, you ensure that your interests are protected, and your wishes are honored during times of incapacity or disability. An EPA offers financial and legal security, prevents potential conflicts, provides flexibility and continuity in decision-making, and eliminates the need for an application for trusteeship. By taking the time to establish an enduring power of attorney, you can have peace of mind knowing that your affairs will be managed competently and in alignment with your values when you are unable to do so yourself.
Our skilled and experienced Spruce Grove Estate Planning Lawyers and Drayton Valley Lawyers have a depth of knowledge that you can use to ensure that your EPA meets your desired Estate Planning objectives. If you wish to discuss how an Enduring Power of Attorney might help you or your family, please don’t hesitate to contact us for an initial consultation.
Please be advised that this article was prepared by Main Street Law LLP in Spruce Grove in May of 2023, and is intended as a general overview and general information on a legal subject as the law exists at the time of writing and is not intended to be legal advice. Often the specific facts of your legal matter may change or impact the applicability of this information. For legal advice related specifically to the facts of your concern, please consult with any of the Estate Planning Lawyers at Main Street Law LLP.
