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What is a Power of Attorney and Do You Need to Appoint One?

The attorney: A mentally capable adult who is not the owner, operator or employee of a nursing home where the donor resides.


Power of attorney, donor, beneficiary … all terms you may have come across as you begin to make plans for your future. But what do these words mean exactly? Here, a glossary of terms.

Donor: An adult capable of making their own decisions who needs another person to act on his or her behalf.

The attorney: A mentally capable adult who is not the owner, operator or employee of a nursing home where the donor resides.

Power of Attorney: A document in which one person (the donor) appoints another person (the attorney) to act on their behalf. Military personnel who risk becoming injured while travelling overseas, or older adults who foresee needing assistance with their affairs later in life, might consider appointing a Power of Attorney. Powers of attorney can be either “ordinary” or “enduring”.

Ordinary Power of Attorney: In this situation, the donor is giving the attorney power to manage their finances and property on their behalf. Here, the terms of the contract would cease if donor loses mental capacity.

Enduring Power of Attorney: In an enduring Power of Attorney, the attorney is in charge of managing the donor’s finances and property both while the donor has mental capacity as well as when they are no longer mentally capable. (Note that the donor must be competent at the time the power of attorney is signed.)

Executor: A power of attorney is not valid if the donor passes away. In this case, the executor, as outlined in the donor’s last will and testament would take control of the donor’s finances and property and distribute it as requested by the donor.

Representation Agreement: This document gives authority to another person to make decisions regarding an individual’s health and personal care. It differs from a Power of Attorney which gives authority over legal and financial matters. An Enhanced Representation Agreement goes a step further, granting another person authority over preservation of life and employment decisions.

If you don’t have a Power of Attorney and something happens to you, a guardian may be appointed by the courts to handle your affairs.

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