Role of power of attorney versus estate trustee – MoneySense

These two documents ensure that one’s affairs are properly managed, even if the person becomes unable to make decisions due to incapacitation or other reasons. The documents are legally binding and grant a designated individual the power to act on behalf of another person, known as the donor or grantor. The person having the power of attorney created must have the mental capacity to understand the consequences of the document they are establishing and the choices they are making within the document.

Let’s review the types of power of attorney documents to understand the impacts of death on these documents.

What is the power of attorney for personal care?

As you mentioned S., this is the role your friend held for her uncle. A personal care power of attorney allows an individual to ensure decisions for their care and health are made according to their wishes when they are unable to decide themselves. It provides peace of mind, promotes autonomy and safeguards their interests and well-being.

When thinking about our personal care, it is important to clearly articulate the extent of decision-making authority and any specific instructions or limitations within the document. These may include decisions related to medical treatment, residence, nutrition, personal hygiene and other matters directly impacting the grantor’s personal care, such as grooming and/or beauty and attending social gatherings.

What is the power of attorney for property?

The POA for property outlines who can take care of that same person’s financial affairs. So it may not be the same person as the POA for personal care.

In Canada, there are three main types of power of attorney for property documents:

1. General power of attorney: A general power of attorney grants the broad powers to manage the financial and legal affairs. It allows the POA to manage banking, property transactions, investments and income tax returns. This is typically a temporary arrangement or used in situations where the grantor wants someone to handle their affairs while they are physically absent, such as traveling abroad for a long length of time.
2. Specific/limited power of attorney: A specific or limited power of attorney grants particular actions or decisions. For instance, the grantor may authorize the POA to sell a property, make healthcare decisions, or sign contracts on their behalf. This type of POA is often used when the grantor needs assistance with a particular task but doesn’t want to grant general decision-making authority.
3. Enduring/continuing power of attorney: An enduring or continuing power of attorney comes into effect when the grantor becomes mentally incapacitated. This POA is crucial for situations where the grantor anticipates future incapacity due to physical or mental illness, injury or old age.

What is an estate trustee?

An estate trustee, also known as an executor, is responsible for managing the deceased person’s estate and carrying out their wishes as outlined in their will. It is essential to have a will in place to designate an estate trustee and provide instructions on how the estate should be distributed.

The powers and responsibilities of an estate trustee are typically broader than that of a POA. The estate trustee is responsible for various tasks including, but not limited to, identifying and valuing the deceased’s assets, paying off debts and filing income tax returns, fulfilling any necessary documents and distributing remaining assets to the beneficiaries, as specified in the will.