Last Updated April 27, 2023

What is a Power of Attorney?

A Power of Attorney (POA) is a legal document that gives someone the authority to manage your affairs on your behalf. The parties in this contract are known as the:

• Donor: The person granting powers
• Attorney: The person(s) receiving powers 

An attorney can make decisions regarding your finances, business, property, and more. This authority is crucial if you want someone to legally represent and advocate for your interests in situations where you can’t. 

A trustworthy attorney is a valuable life tool whenever you:

• Acquire a health condition that may affect mental capacity 
• Work in a high-risk environment
• Need help managing a business
• Leave the country for a while

What are the different types of Power of Attorney?

Though provinces and territories use different names, there are generally two types of POAs:

1. Ordinary Power of Attorney 

This is valid as long as the proper authority deems you to bementally competent. If you become incapacitated while you have an Ordinary POA, the POA will automatically end. Generally, having legal capacity means: 

• You understand your situation and the results of your actions
• You are the legal age of majority

As long as you have the capacity to do so, you can revoke an ordinary POA at any time. Or you can set a date for your attorney’s powers to expire within the original document.

Ordinary POAs typically grant special powers. For instance, say you only need your attorney for financial issues. So you create a financial power of attorney, perhaps limiting their powers by specifying which bank accounts they can access and how much money they can withdraw. Then, you set the POA to expire once the task is complete or when you’re able to return to your duties.

2. Enduring Power of Attorney

Also known as a durable, lasting, or continuing Power of Attorney, this document remains valid if you’re incapacitated. For example, you might become incapacitated if you suffer: 

• A sudden and severe medical event—like a stroke
• An injury while at work, driving, etc.
• A debilitating illness

Once an authority deems you mentally incapacitated, you cannot revoke a Power of Attorney.

Someone with an Enduring Power of Attorney is likely to grant broad authority over the different areas of their life. This way, their attorney can manage important and recurring tasks while the donor is incapacitated. 

An Enduring POA can also be made as a Springing Power of Attorney—which means the document goes into effect on a certain date or upon a certain event (e.g., as soon as the donor becomes incapacitated) instead of when signed.

Who can you give powers to in a POA?

Powers can be given to your spouse, a family member, a trusted friend, a professional such as a lawyer or accountant, or any other capable adult. The person you assign powers to has the right to refuse, so you should always discuss your plans with the person you want to give powers to before proceeding.

You can choose to give Power of Attorney to more than one person, and specify that your attorneys must all agree before taking action on your behalf. Alternatively, you can make it so your attorneys can act independently of each other.

You can also identify an alternate attorney who is able to act for you if the original attorney is unable or unwilling to do so.

How does a Power of Attorney work?

With an Ordinary or Enduring POA, an attorney’s powers are active as soon as you sign and execute the document (unless you create a Springing POA that specifies a date for their powers to go into effect). This form outlines the terms and conditions of the attorney’s power. What’s more, every province and territory has laws governing POAs (e.g., guidelines for assessing capacity and legal requirements for an attorney). 

Once a person dies, their POA becomes invalid. Control over the deceased’s estate then goes to the executor named in their Last Will and Testament.

Who can be an attorney?

Each province or territory has a Power of Attorney Act (or similar legislation) that regulates who’s eligible to be an attorney. Common provisions in these acts include:

• The attorney can’t be involved in any bankruptcy proceedings when the donor assigns powers to them
• If the donor lives in a care facility or nursing home, the attorney cannot be someone who works in or owns the facility
• The attorney must be of legal age and mentally capable

You’re free to choose who you’d like to act as your attorney, as long as they meet the legal requirements. For instance, you can give powers to your spouse, sibling, parent, or a trusted friend. On the other hand, you may prefer to hire a professional such as a lawyer or accountant. 

You can even appoint multiple attorneys if it suits your purposes. In this case, your Power of Attorney will outline how the attorneys can operate. For example, you might require them to agree before taking action on your behalf. Alternatively, you can make it so your attorneys can act independently of each other.

You can also identify an alternate attorney who is able to act for you if the original attorney is unable or unwilling to do so.

What are the duties of a Power of Attorney?

The applicable Power of Attorney Act may specify the duties of an attorney. For example, common requirements include:

• Prioritizing the personal health and care of the donor
• Acting in honesty and good faith
• Acting only under the authority they’re given
• Keeping records of their business

Attorneys are fiduciaries for donors—which means they must always act in the best interests of the donor. What’s more, certain laws might restrict the ways in which an attorney can deal with a donor’s money and property. They might also require an attorney to keep their finances separate from the donor’s and to file reports periodically to the government. As such, it’s important to research which laws apply to you. (Contact a lawyer for any specific questions about your situation.)

In addition to the duties of an attorney required by law, the Power of Attorney form outlines their responsibilities. 

What an attorney can do

Your attorney can generally perform any actions that you can, for example:

• Selling, leasing, or dealing with real estate
• Spending money to cover home and family expenses
• Filing and managing your tax information
• Sending gifts to family or charity
• Managing your business and investments
• Employing professionals to care for you or your family

LawDepot’s Power of Attorney template prompts you to consider enforcing typical attorney duties as well, such as keeping financial reports. 

You may also want to specify how you’ll compensate the attorney for their role. For instance, you might reimburse them for any out-of-pocket expenses or pay them at a rate set by law.

What an attorney can’t do

Your attorney can't make medical decisions for you. If you want to put that type of provision in place, consider creating a Health Care Directive (also known as a Living Will, Personal Directive, or Power of Attorney for Personal Care).

Your attorney cannot create a new Last Will and Testament for you, or alter your existing Will. They also can't create a new POA on your behalf and assign it to someone else.

You can choose to place restrictions on your POA in order to limit the attorney's actions to specific areas of your finances, such as a certain piece of real estate or a specified business investment.

Who can override a Power of Attorney?

Generally, only the donor can cancel their Power of Attorney or override the powers of their agent—and they may only do so if they’re mentally competent.

Does a Power of Attorney need to be notarized in Canada?

Each province or territory has signing requirements, but Ordinary and Enduring POAs usually don’t need notarization. 

However, the Land Titles Act in your jurisdiction may apply if your attorney handles real estate transactions or files the POA at the Land Titles Office. In this case, you’ll likely need to notarize your document.

Although signing rules typically apply to Enduring POAs, some provinces (e.g., Nova Scotia) also have requirements for Ordinary POAs. In any case, it’s a good idea to have at least one person witness your Power of Attorney. For this reason, LawDepot’s Power of Attorney template always includes a witness signing line.

The following table outlines signing requirements for Enduring POAs in Canada.

Related Documents:

• Last Will and Testament: Specify how you wish your estate to be dealt with after you die.
• End-of-Life Plan: Save loved ones from grief by stating what to do with your body and memorial services when you die.
• Revocation of Power of Attorney: Use this form to revoke an existing Power of Attorney.
• Gift Deed: Keep a record of any gifts (e.g., property or large sums of money) you bestow to another party.
• Living Will: Clarify your preferences for medical treatments and appoint a health care proxy.