We are seeing more and more homes now being sold under power of attorney. Our aging demographic is making this paperwork quite a bit more prevalent than ever before. All of us, no matter what age, run the risk of becoming incapacitated, temporarily, or permanently. Are you prepared?
Although assigning an individual or trust company to act as attorney due to illness or absence is relatively simple, you will want to ensure your wishes are carried out, but, also that the paperwork is valid. In the age of DIY thinking, there are now cases where power of attorneys have been deemed invalid. Here are some points to consider:
- If you are purchasing a home and will be absent on closing and have appointed a power of attorney.....is your lender aware and accepted that the mortgage will be signed by your POA? Be aware that the lender can refuse to fund the purchase even if the paperwork is valid.
- Without a power of attorney, no one can sign legal documents or cheques on your behalf. This means if you are incapacitated, bills can be left unpaid and your dependents may go indefinitely without the benefit of your financial support.
- Without a power of attorney, your assets will be frozen. Your family will need to apply to the court for the power to exercise any control over your assets.
- You can give unlimited power to your POA, or you can restrict for a period of time (as would be the case on a property purchase). You can restrict on the type of property so different POA’s can be assigned to handle different assets.
- A power of attorney is void upon your death.