Hopefully, you’ll never suffer an illness or disorder that seriously impairs your cognitive functioning. But if you ever suffer such a condition, you may lose the ability to manage your finances – from paying bills to making investment and income decisions. And you could be vulnerable to financial fraud. This is when you want a power of attorney, or mandate in Quebec. Power of attorney is a legal document, and “attorney” is the person you appoint to conduct your financial affairs, which can be your spouse, a family member, friend, professional or trust company.
In the document, you can stipulate how it’s determined that your representative acts on your behalf. For example, you could require that your doctor assesses your mental capacity or leave the decision to your representative.
Without this document, you place your family in a troublesome situation if you become incapacitated. Family members may be in conflict, trying to determine who should manage your finances. And the person who assumes the role must apply to provincial court to become guardian of your property.
Note that the power of attorney for property deals with investments, bank accounts, real estate and other assets and liabilities. You also require a document for your personal care (document varies by province), naming the person responsible for making health and medical decisions on your behalf.
Getting these documents is straightforward, yet it’s sometimes put off. Perhaps that’s because dementia mainly occurs at older ages, but cognitive impairment can also result from an accident causing brain injury, a stroke or another incapacitating illness. It is wise to set up your documents for property and personal care long before they may be needed. If you need guidance on how or where to start, talk to your advisor.