By: JK Law September 11, 2023

How Can an Individual Utilize a Power of Attorney to Manage Business Affairs?

What is Power of Attorney?

As stated, a power of attorney is a legal document in which an individual designates an “attorney” who can act on their behalf to make critical decisions. However, the individual granted power of attorney does not need to be a trained legal professional.

Nevertheless, several legal criteria must be met for a power of attorney to be considered legal. These criteria include:

The document must be written when the individual is capable of making their own decisions.
The document clearly states when the attorney will have the authority to make decisions.

Individuals considering assigning another person to act as their power of attorney should know they can have them obtain legal authority immediately or when they lose their capacity to make decisions.

If you need clarification about your choice, it is in your best interest to consult with an experienced lawyer who can review your case and determine which option works best.

What Two Types of Power of Attorney Are Available For Financial Decisions?

The safest power of attorney is called an “enduring power of attorney.” Unlike other powers of attorney that enable another person to make healthcare decisions or those that end when an individual becomes mentally incapacitated, an enduring power of attorney allows another individual or group of individuals to continue to make decisions.

However, an enduring power of attorney can be revoked if any of the following occur including:

The donor, the person making a power of attorney, dies.
The donor revokes the enduring power of attorney.
A trusteeship order is granted in which an appointed trust is assigned to make decisions on behalf of the adult.
The court cancels a power of attorney.
The assigned attorney dies or loses mental capacity, and no alternate attorney can assume the role.

What Are the Limits of a Power of Attorney?

One of the most considerable benefits of an enduring power of attorney is that the attorney can act with the same legal authority as the donor. Some of the most common business matters an attorney can perform include transferring or selling assets, collecting debts, and paying bills.

However, an attorney cannot make a will on the donor’s behalf. The individual must decide any actions that pertain to a person’s final wishes or how property and other assets should be distributed after a person’s death.

If you still have concerns about the limitations placed on individuals with power of attorney, you must consult a lawyer who can answer your questions.

Why Should I Consult With a Lawyer Before Signing a Power of Attorney?

You should only agree to sign a document allowing another person to act as a power of attorney if consulting a lawyer. Because the power of attorney document grants a wide range of legal authority to another person to handle your business affairs, you want to be sure you can trust the other person to look out for your best interests.

A knowledgeable lawyer can also determine how the document should be written, when the POA should begin, and what stipulations should be included that designate reasons for its termination.

Power of attorney can be a vital tool for business transactions; however, before making a decision, make sure that creating a POA is actually something you need.

If you want more information about the benefits and potential drawbacks of creating a power of attorney, contact JK Law of Calgary by calling 587-742-2136 and ask to schedule a consultation with a highly trained lawyer who can evaluate your needs.