A Power of Attorney is a written document in which a person, called a "Donor", grants someone else the power to act on his or her behalf. The "Attorney" is the person who is empowered to act on behalf of the Donor under a Power of Attorney.

The loss of the ability to manage one's own financial affairs is becoming a fact of life for a growing number of Albertans. Until relatively recently, a Power of Attorney was not available as a means of planning for and dealing with mental incapacity. If a person who had signed a Power of Attorney later became mentally incapacitated, that Power of Attorney became null and void. However, the Powers of Attorney Act (the "Act") was proclaimed in force in June, 1991. Under this legislation you can ensure that any Power of Attorney signed by you will continue to be effective notwithstanding any later mental incapacity. This is known as an Enduring Power of Attorney and an Enduring Power of Attorney can now be employed as an effective means of planning for a person's financial management in the event of mental incapacitation.

Prior to the Act, the loss of the capacity, ability or willing-ness to manage one's financial affairs was dealt with by the friends or family of such a person in one of two ways. Sometimes, the person's affairs were simply dealt with on a practical level, notwithstanding the fact that no one had any legal authority to do so. It is not recommended that people proceed in this manner and the need for actual legal authority often arises in any event. Before the Act, such legal authority to assume management of another's financial affairs could only be obtained by an applica-tion to the court under the Dependent Adults Act for the appointment of a Trustee of the estate and financial affairs of the dependent adult.

An Enduring Power of Attorney is a relatively simple means of allowing a person to plan for his or her future financial care compared to an application to the court under the Depenent Adults Act. The court application will be more expensive and time consuming. Furthermore, the person whose interests are paramount, the proposed dependent adult, is merely a passive participant in such court proceedings. On the other hand, pursuant to an Enduring Power of Attorney, the Donor has the ability to choose the person or persons to act on his or her behalf in the event of future mental incapacitation and to determine to a large extent the rights and duties that such person or persons will have. Proceeding under the Dependent Adults Act can also involve emotional stress and stigma for the dependent adult and the dependent adult's family. Such problems can be minimized by use of an Enduring Power of Attorney.

Under the new legislation a Power of Attorney can take two forms: an immediate Enduring Power of Attorney, or a springing Enduring Power of Attorney.

Under an immediate Enduring Power of Attorney, the Donor grants someone the authority to immediately act as his or her Attorney and to continue to do so notwithstanding any subsequent mental incapacitation of the Donor.

A springing Enduring Power of Attorney provides that the Power of Attorney comes into effect at a specified future time or on the occurrence of a specified contingency including, but not limited to, the mental incapacity of the Donor. You could also use the Power of Attorney if you are travelling outside of Canada and require your Attorney to look after your affairs while you are absent. In such a situation you could have the Power of Attorney come into effect upon your written declaration that it has come into effect.

For an Enduring Power of Attorney to be legally valid, it must meet all of the requirements of the Act. It must be in writing, dated and signed by the Donor in the presence of a witness. The witness cannot be the person designated as the Attorney nor the attorney's spouse.

Basically, the Attorney has the authority to do anything on the Donor's behalf that can legally be done by an Attorney. Obviously, the Attorney cannot serve jail time, change the Donor's Will or marry on the Donor's behalf, but an Attorney does have a very wide range of powers under a Power of Attorney. The Attorney is able to assume complete authority over the Donor's financial affairs and to do anything with the Donor's property which the Donor could have done. However, in granting a Power of Attorney, the Donor may put restrictions and conditions the powers of the Attorney. For example, the Attorney may be authorized to deal with only certain aspects of the Donor's property or financial affairs. Similarly, the Donor may place restrictions or limitations on the purposes for which the Donor's funds can be used by the Attorney.

A Donor may revoke an Enduring Power of Attorney at any time as long as the Donor is mentally capable of understanding the nature and effect of the revocation. The Power of Attorney also terminates if either the Donor or the Attorney dies.

A person appointed under an Enduring Power of Attorney to act on behalf of the Donor has no obligation to report to the courts in respect of his or her activities under the Power of Attorney. A trustee appointed by the courts under the Dependent Adults Act is required to report periodically to the court. While this helps to ensure that the trustee is dealing honestly and fairly with the dependent adult's affairs, it also adds to the cost of the process.

In conclusion, an Enduring Power of Attorney is a relatively simple and straightforward alternative to a more costly application to the court under the Dependent Adults Act. However, the decision to sign an Enduring Power of Attorney and the choice of Attorney must be carefully considered.