Power of Attorney for Property

More information about Power of Attorney for Property

A Continuing Power of Attorney for Property is a legal document by which you give someone else the authority to make decisions about your finances. The person who is named as the attorney does not have to be a lawyer. The Power of Attorney is called “continuing” because it can be used after you are no longer mentally or physically capable to make the financial decisions. Some people use the word “durable” which means the same as “continuing”. We advise our clients to have a Continuing Power of Attorney along with a Power of Attorney for Personal Care.

The Substitute Decisions Act, 1992, refers to decisions about property management and powers of attorney for property. “Property” means finances, which include any type of financial decision or transaction that a person would make in the course of managing his or her income, spending, assets, and debts. For example, it could include budgeting expenses and paying bills, doing tax returns, safeguarding valuables, selling real estate, or making loans.

Key Takeaways

Assets like real estate, stocks, bonds, and bank accounts owned by a principal are included under Power of Attorney for Property.
In real estate matters, POA for Property may be used by individuals who are selling a home but are living overseas and unable to be present during the sale.
Given the legal implications a lawyer’s expertise should be sought when a Power of Attorney for Property is being drafted.

How a Power of Attorney for Property Works

Power of Attorney for Property usually includes all assets held by the principal, such as real estate, bank accounts, and stocks. The terms of the POA, including what can and cannot be managed, are determined at the time the POA is created.

Key Takeaways

In real estate matters, Power of Attorney for Property may be used by individuals who are selling a home but are living overseas and unable to be present during the sale. 
Assets like real estate, stocks, bonds, and bank accounts owned by a principal are included under Power of Attorney for Property.
For Power of Attorney for Property to be invoked and valid, two witnesses must be present at the signing of the document.
The person who gives a Power of Attorney can always withdraw, rescind or revoke the Power of Attorney.

A general Power of Attorney for Property could encompass the entirety of the principal’s holdings of value. The attorney would have broad decision-making powers over effectively all the assets for an unlimited period in a situation when the principal is not able to act for herself or himself.

A more limited Power of Attorney for Property can also be granted with the scope limited to a specific transaction the principal wants the attorney to handle on the principal’s behalf.

Two witnesses are required at the signing of a Power of Attorney for Property for it to be valid.

How a Power of Attorney for Property is Applied in Practice

Power of Attorney is frequently associated with situations where the principal is physically or mentally incapable of actively making decisions regarding their assets. This can include being hospitalized or under other forms of medical care that constrain the principal’s ability to take action for themselves. If an individual is rendered unconscious at a time when assets must be managed, the Power of Attorney can be applied by the attorney to take action in the interim.

In real estate a Power of Attorney could be granted to allow the attorney to oversee the handling of specific assets while the principal is unavailable. For example, the principal might be out of the country when a transaction is due to close on some real property they own. That could be for the sale of real estate or even a business.

Special considerations

To grant Power of Attorney for Property, the principal must be at least 18 years old, be in full control of their mental faculties, understanding of the value of assets being put into the attorney’s care, and be aware of the authority being granted to the attorney.

Bestowing such control to another individual comes with an expectation that the attorney will act according to the instructions and best interests of the principal. 

Special powers of attorney

A special Power of Attorney is also called a Limited Power of Attorney. It is a legal document that authorizes a person, called an agent or an attorney to act on behalf of another person, known as the principal or grantor, under specific, clearly laid-out circumstances.

Many Canadians own property outside Canada which they wish to sell. Alternatively, Canadians may wish to buy property outside Canada. In these situations, it is very common for the Canadian resident to give a Limited Power of Attorney to a person overseas to sell or buy the property on their behalf. Once the particular transaction is completed the Power of Attorney ends. The attorney cannot use the Power of Attorney for any other purpose.

termination of a power of attorney

The principal who gives a Power of Attorney can always withdraw, rescind or revoke a Power of Attorney.  No reasons need to be given. When an individual passes away, the Power of Attorney becomes void, and the person’s last will and testament comes into effect.

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