According to a recent survey, only 35 percent of Canadians have appointed a power of attorney (POA).¹ How about you? Do you have POA documents in place? While the names and obligations may vary by province, generally there are two types of POA intended to protect an individual should they become incapacitated: i) POA for property, which includes managing finances and other assets on behalf of the incapacitated; and ii) POA for personal care, which includes making healthcare decisions.

Here are some reasons why the POA should be a consideration:

• On average, we will live with good cognitive health to around age 77.² However, our average life expectancy is well beyond this age.
  
• Those over age 85 have a 1-in-4 likelihood of suffering from some form of dementia.³
  
• Regardless of age, life is unpredictable: accidents or unexpected health issues can occur at any time.
  Even if a POA exists, consider reviewing your documents from time to time as circumstances can change. There may also be situations which may warrant revisiting your POA, including: ‍

Personal wishes or specific instructions have not been discussed. Engaging in conversations with family members and your “attorney” (the person(s) designated to make decisions under the POA) while you are “capable” can go a long way in maintaining familial harmony and ensuring your wishes are carried out. Recent surveys suggest the vast majority aren’t having these critical discussions. In one unfortunate case that led to litigation, two brothers couldn’t agree on the type of care for their mother — one wanted life-prolonging care while the other wanted hospitalization only for comfort.⁴

Multiple attorneys have been appointed. Many parents feel the need to treat children fairly by jointly naming them as attorneys; however, consider that in some situations the greater the number of attorneys appointed, the greater the opportunity for conflict.

Attorneys have not been updated. Have your designated attorney’s circumstances changed? Updates may be needed to address the incapacity or death of a named attorney. Or, there may be complications if an appointed attorney moves outside the country, i.e., a non-resident attorney for property may be subject to rules that prohibit a financial advisor from receiving instructions. Often, there is value in naming a contingent attorney who can step in.

Underestimating the cost of care. While the appointed attorney for personal care is not personally responsible for funding the financial obligations of your desired care, if the associated costs are not properly planned for, this can unfairly complicate the attorney’s role. Alternate care may need to be considered, possibly against your wishes. Consider that the cost of care associated with incapacity, such as long-term care (LTC), can be extensive; on average around $36,000 per year for a private room at a care facility, or in excess of $130,000 at home.⁵ Planning ahead can help protect family members from an unexpected financial burden. Often when children are appointed as POA attorneys, they feel pressure to contribute.

If you have yet to give your POA the thought it deserves, why not make this a priority? Please consult an estate planning professional.

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^{1. www.niageing.ca/canadian-perspectives-on-estate-planning; 2. www.washingtonpost.com/ national/health-science/research-shows-that-the-prevalence-of-dementia-has-fallen-in-the-united- states/2018/06/15/636d61ac-6fd1-11e8-bf86-a2351b5ece99_story.html; 3. www.cihi.ca/en/dementia- in-canada/dementia-in-canada-summary; 4. White v White, 2017 ONSC 4550; 5. Based on $33,349/yr. (2021), grossed up by 4% per year. www.advisor.ca/news/industry-news/most-canadians-arent-planning- for-long-term-care-costs-survey/. At home, based on avg. cost of care of $30/hr., 12 hrs./day, 365 days/yr.}