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So many times in life, for one reason or another, we need someone to do us a favour. It may be a big favour or a little one. And it is not just anybody we want to do that favour. We usually want someone we can trust, because that favour may involve something confidential, sensitive, or is a matter of life and death.
The truth is, even though we call it a “favor,” it sometimes places huge, even burdensome, obligations on the person helping us. Very often, we do not even think of paying them. At best, we say thank you. Or we promise to be there for them if they ever need us. But the reality is this. When we ask someone to do us a favor, we may actually be giving them authority to act on our behalf without considering potential risks. What if the person fails to act, makes decisions that lead to a financial loss, or acts outside the scope of what we intended? What if the person didn’t even want to help? Then, we may have little protection or recourse.
So, have you ever heard of a Power of Attorney? Simply put, a Power of Attorney is a written legal document that allows one person (called the principal) to give powers to another person (called the attorney, who does not have to be an Attorney-at-Law) to act on his or her behalf. Granting someone authority over our affairs should never be unlimited or unchecked. A properly structured power of attorney ensures that the scope of authority is clearly defined, responsibilities are understood, and accountability is built in. A Power of Attorney transforms a casual “favor” into a legally sound, controlled arrangement that protects everyone involved. With a Power of Attorney, there is “no blank cheque”.
By definition, you will agree that a Power of Attorney is indeed powerful and useful. It may be given for a short period of time through a general Power of Attorney, with a limited scope and for a specific task. Or it may be for the long term, through a durable Power of Attorney, which will remain in effect even if the principal later becomes incapacitated.
Please note this very important point. At the time of executing a Power of Attorney, the principal must have the requisite capacity. In simple terms, you must understand what you are doing and understand the nature and effect of the document you are signing. In fact, if you have executed a General Power of Attorney, it only remains valid while you remain competent. On the other hand, a durable Power of Attorney continues to be valid even if you become mentally incapacitated.
As an example, an elderly person who has recently been diagnosed with Dementia or Alzheimer’s disease and who may potentially become incapacitated may consider preparing a durable Power of Attorney. This would allow their adult child to step in and make important decisions on their behalf, such as authorizing medical procedures, managing bank accounts, and handling property matters.
Many people also spend long periods overseas. They may be out of the country for a few years for military deployment, to take up a new job offer, to further their education, to address family commitments, or to manage a business. If this applies to you, a Power of Attorney can be very helpful. While you are out of the country, your attorney will be able to undertake several activities on your behalf. For example, if you plan to rent or sell your property or vehicle, your attorney can step in and act for you.
But here is the deal. If you appoint an attorney to act on your behalf, that person is not free to do whatever he or she wants. This is not a blank cheque. The attorney must act strictly on your instructions and within the powers given. That is why choosing an attorney is serious business, and it is more than asking someone to do you a favor. You are not selecting a casual helper. You are selecting someone of utmost integrity, someone you trust completely, because you are placing legal authority in their hands.
As stated above, the powers you give may be specific or general. So, for example, you may give your attorney the “power to deal with your land”. That sounds simple enough, but it is quite broad and could even be interpreted to include the power to sell your land, but not to borrow money, unless this is clearly stated. Hence, many people prefer to grant specific powers rather than broad, general ones. That way, everything is clearly defined and controlled. But even where powers are specific, your attorney may still do anything necessary or incidental to carry out those powers. For example, if you appoint your attorney to sell your house, that is a specific instruction. But in order to get the best price, the house may need to be properly presented, cleaned, and made attractive to buyers. You did not specifically say “hire a cleaner,” but that may still be necessary to properly carry out the sale.
It really goes without saying that the instructions you give your attorney must be written in clear and simple language, so there is no confusion or ambiguity in the future. Because once things go wrong, unclear words suddenly become very expensive words. And remember, actions have consequences. So, before you give anyone power, think carefully about what those powers really mean in practice and whether you should make that Power of Attorney revocable.
While it is not mandatory for an Attorney-at-Law to prepare a Power of Attorney, it is highly recommended. This helps to ensure that the document is properly drafted, properly executed, and properly registered where required by law. For instance, where you are giving an attorney authority to deal with any interest in registered land, the Power of Attorney must be properly executed and filed with the Land Registry. Once this is done, the attorney can lawfully carry out transactions involving that land on your behalf. It is also important to note that a deed affecting an interest in land, executed by your attorney under a valid Power of Attorney and recorded in the General Registry, has the same legal effect as if you personally signed it yourself.
So, the next time you need a friend, a relative, or even a trusted person to do you a favor, pause for a moment. You may, in fact, need to execute a Power of Attorney.
Contributed by:
Anne Marie Thompson
Attorney-at-Law
Sandonaconsulting@yahoo.com
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