Video: What is a power of attorney?

David Chilton:

You know the most common question, by far, I get asked about a power of attorney?

“What is a power of attorney, exactly?”

The second most common question is: “who’s the attorney here?”

I’m not kidding, by the way.

So, let’s start with a basic definition: a power of attorney is a legal document that gives someone you trust the authority to make decisions on your behalf when you can’t make them yourself. It’s that simple.

The person you appoint is called your attorney. No, they don’t need a law degree.

The power of the attorney, the power being granted to the attorney, is the power to make decisions on your behalf.

Ok, two basic types of powers of attorney in Canada. One for property—your money, your assets, your income, your bills—in essence, your financial matters. One for personal care—health and personal decisions.

Kind of like two sets of responsibilities—the “money stuff” and the “life stuff.” Two documents. Two appointments.

What kind of person should you appoint?

Trustworthy! Honest! Caring! Responsible!

They have the power. Literally.

Would it help if the person appointed your property power of attorney had a good financial mind?

Not if they weren’t honest, if they weren’t trustworthy! It may even hurt.

Trustworthy. Honest. Caring. Responsible.

Same on the personal-care front.

Someone who loves and respects you because they will put your interests first.

Should you appoint the same person for both powers of attorney? I don’t know. It can be a great idea if they have the ideal qualities. Nice, by the way, if the person is close by geographically, too. Convenience can help here.

But, hey, maybe you want to split the duties between two people so each isn’t overwhelmed. But now we need not only the qualities of honesty, empathy, trustworthiness, we also need two people to be respectful to each other, to cooperate well, to communicate effectively. Think all that through. They must work together.

Example: the personal care attorney can’t decide you should live in a top-notch assisted-living facility without talking to the property attorney to make sure the financial situation will support it.

If no one in your life has these needed qualities, do not settle for less. Huge mistake. Talk to a trust company official and appoint a corporate attorney for property.

When my dad was choosing his attorneys years ago, I told him to select the person he most trusts, thinks most highly of from a character perspective. He wrote his own name in. That’s not allowed.