Will - Updating Will - Invalid or No Will - Power of Attorney - Personal Directive
MISTAKES to AVOID in your POWER of ATTORNEY
Legally protect your financial and property interests while still alive, yet incapable of acting for yourself due to personal incapacity.
To schedule an appointment, contact our law firm at 403-400-4092 or Chris@NeufeldLegal.com
Given the significance of a power of attorney, which addresses financial and property-related matters, should you become incapacitated, or otherwise be unable to make decisions for yourself, it is important that you avoid critical mistakes both when creating your power of attorney and when your power of attorney is put into effect, including:
Mistakes When Creating the Document
A. Not Making it Durable
The most common and significant mistake is creating a non-durable Power of Attorney without realizing it.
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A Durable Power of Attorney remains valid even if you (the Principal) become incapacitated (unable to make decisions). This is usually the entire point of a Power of Attorney for finances.
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A Non-Durable Power of Attorney becomes invalid the moment you become incapacitated.
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The fix: The document must explicitly state that it is a "Durable" Power of Attorney. If it doesn't, it might not be valid when it's needed most.
B. Not Being Specific Enough About Powers
If the document uses only vague or general language, your agent (the person you appoint) may have difficulty using it for specific tasks, as financial institutions often require clear authorization.
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The fix: Clearly list the powers granted, such as the authority to manage bank accounts, sell real estate, file taxes, or access retirement funds. While general grants of power are often included, it's best practice to be specific about the most important functions.
C. Choosing the Wrong Agent
The agent has a fiduciary duty to act in your best interest, but if you choose someone who is dishonest, financially irresponsible, or easily influenced, your assets could be at risk.
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The fix: Choose someone you trust completely to be responsible, ethical, and capable of handling financial matters. Consider naming a reliable successor agent as a backup in case your first choice is unable or unwilling to serve.
D. Not Following Jurisdictional Rules
While a Power of Attorney is generally recognized across provinces, each provinces has specific laws regarding execution (signing). If you don't follow these rules, the document may be invalid.
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The fix: Research your jurisdiction's legal requirements for witnessing and notarization. Always have the document prepared and executed according to the laws of your province, with the engagement of an experienced lawyer being invaluable to being legally compliant.
Mistakes After the Document is Created
E. Hiding the Document or Forgetting to Share It
A Power of Attorney is useless if your agent doesn't know it exists, where it is, or if they can't access it quickly.
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The fix: Inform your agent that they have been appointed. Give them a copy and let them know the location of the original document. You should also consider informing your bank or financial advisor that a Power of Attorney exists and who your agent is.
F. Waiting Too Long to Create It
You must have legal capacity (be of sound mind) to sign a Power of Attorney. If you wait until you are already declining mentally due to illness or injury, it will be too late.
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The fix: Create your Power of Attorney as part of your comprehensive estate plan while you are healthy and clearly understand what you are signing.
G. Failing to Update or Review It
Life changes like divorce, death, or major moves can make the original document obsolete.
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The fix: Review your Power of Attorney every few years, or after any major life event, to ensure your named agents are still the people you want to manage your finances.
H. The Agent Misusing Their Power
This is a mistake made by the agent, but it's one you can try to preempt. The agent might confuse a gift (like a Christmas bonus) with the powers granted to manage your money, or they might engage in self-dealing.
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The fix: Include language in the Power of Attorney that clearly restricts or permits gifts or other transactions that could be seen as conflicts of interest. The Principal should also discuss their expectations with the agent ahead of time.
Whether you are looking to have a power of attorney for finances created or require legal representation in the implementation of an incapacitated person’s power of attorney, contact our law firm today at 403-400-4092 or via email at Chris@NeufeldLegal.com to schedule a confidential initial consultation.
IMPORTANT NOTE: This website is designed for general informational purposes. The site is not designed to answer specific questions about your individual situation or entitlement. Do not rely upon the information provided on this website as legal advice in respect of your individual situation nor use it as substitute for individual legal advice. If you want specific legal advice, you need to engage a lawyer under established legal engagement procedures that have been specifically agreed to by that lawyer.
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