Wills are important legal documents to have if you have any assets. These documents are meant to provide clear instructions as to how you want your assets to be distributed. They are the only means by which to ensure your wishes about the distribution of your assets are honoured. Although you can write your own Will or use online services to construct one, it is important to make sure your Will is clear. If not, it can become subject to Court scrutiny, which costs time and money (Law Society of Ontario, 2012).
There are two types of Power of Attorney (POA) for financial matters, general and durable. These are legal documents that authorize another person to act on your behalf with regard to the management of your assets (finances/money and property). A General Power of Attorney authorizes a person to act on your behalf for financial (including business) and legal matters. This type of POA, however, ends the moment you become cognitively incapacitated or die. A Durable Power of Attorney gives the same authorization to a person as a General POA, but a Durable POA continues if you become cognitively incapacitated or die (Canada, n.d.-c).
According to the Law Society of Ontario (2012), POAs are legal documents that come into effect the moment you sign them. By creating a Durable POA, you are engaging in advanced planning. The goal is to have a plan in place in case you become incapacitated and can no longer make financial decisions for yourself (temporarily or permanently). The Law Society of Ontario advises choosing the person identified in the POA document carefully. The person should be someone that you trust implicitly to act on your behalf.
VIDEO: Your Law – Wills & Estates
In this video members of the Law Society of Ontario explain the importance of Wills and Powers of Attorney (for financial matters).