How Much Power Does a Power of Attorney Actually Have?

In Canada, there are two types of power of attorney: general power of attorney and enduring power of attorney, both of which have their own sets of specific features and implications that can significantly impact the planning of an estate and the making of financial decisions.

With no direct authority to make any changes to a will, either power of attorney in Alberta serves primarily to give an individual the power to make both legal and financial decisions on the principal’s (appointing person’s) behalf, especially should the circumstances involve incapacity. While it is true that the appointed attorney can influence financial matters, a separate legal process is required to alter any of the provisions made in a will.

In short, a power of attorney doesn’t have the power to make any changes to a will; instead, a new one would have to be created, or a codicil would have to be executed—a legal document making amendments to an existing will’s specific provisions.

So just how much power does a power of attorney have? Let’s take a closer look:

The difference between a general POA and a special POA

Granting broad authority to one individual—appointed as the attorney—a power of attorney is a comprehensive document allowing a range of legal and financial affairs to be managed on behalf of the principal.

An individual designated as a Special Power of Attorney, on the other hand, has the power to handle certain, specific matters on the principal’s behalf.

It’s important to note that the effectiveness of these POAs is dependent on the principal being mentally competent. The general POA or special POA’s powers become null and void if the principal loses their mental capacity.

The powers of an Enduring Power of Attorney (EPA)

Should the principal become incapacitated mentally an EPA is still effective, giving it its title of ‘enduring.’ The nature of an EPA ensures that decision-making authority can continue seamlessly for the appointed attorney during any period in which the principal may be vulnerable.

In terms of long-term planning, EPAs are especially valuable and provide an added layer of protection should the principal not be able to manage their legal and financial affairs without assistance.

What can a POA actually do?

The powers of a POA are pretty extensive and encompass a wide range of estate planning matters, both legally and financially. In terms of finances, the attorney is given a level of authority described as ‘financial power,’ which can include such things as the management of bank accounts, carrying out real estate transactions, making decisions related to investments, paying bills, etc.

The POA also grants authority in matters of legality, giving the attorney the right to sign legal documents, get involved in legal proceedings, and make important decisions concerning the personal affairs of the principal.

When professionally drafted, a POA document enables individuals to personalize the level of legal authority and financial power necessary to meet their specific preferences and needs.

What is a POA unable to do?

In order to protect the interests of the principal in Canada, one significant restriction is that the POA may not be used to make any decisions relating to health or medical treatment. Otherwise known as ‘medical power,’ this must be addressed in another document, such as a ‘living will’ or ‘healthcare directive.’

For more detailed guidance regarding appointing an enduring power of attorney in Alberta or to answer any questions you might have about estate planning and the process of making a will, schedule a consultation with a local wills and estate lawyer.