What’s the Difference Between a Will, Power of Attorney and a Personal Directive and Why Do I Need Them?
By Amanda Marsden, Sr. Family and Estate Planning Lawyer, Calgary
Everyone knows that having a will is an important part of planning for your future but what about a power of attorney or personal directive? When deciding which documents you need assistance with, it’s important to understand the purpose of each.
What is a Will?
A will is the document which gives information as to your wishes upon your death. Typically, a will deals with the following:
- Remains and funeral arrangements
- Distribution of your assets
- Who you appoint as Executor
- Who you would like to inherit your assets, including any specific gifts
- Arrangements for any children or other dependents
A will is a formal document, signed with two witnesses that allows your family to understand and comply with your wishes after your passing. To ensure your will’s enforceability, it is wise to have the document prepared by a lawyer.
What is a Power of Attorney and Personal Directive?
These documents are similar but have some important distinctions.
The similarity is that both documents provide directions as to your wishes in the event you no longer have capacity to make decisions for yourself. This may occur in instances of severe illness or accident. Determining that you are not able to make your own decisions requires the involvement of a doctor who will complete a capacity assessment. There may be situations in which you lose capacity to make decisions for a short period, but with the passage of time or change in medical condition, that capacity is regained. Regaining capacity would also require the involvement of a doctor completing a capacity assessment.
The differences between these two documents lies with the type of decisions being passed to a third party.
A personal directive specifies instructions for important decisions regarding personal issues like:
- Healthcare and medical procedures
- Living arrangements
This document includes statements regarding your preferences, but also appoints a third party who is responsible for making decisions regarding your healthcare and living arrangements in the event you are not capable of making these decisions.
On the other hand, a power of attorney is a directive for financial matters, such as:
- Paying bills and taxes
- Decisions regarding assets and debts
- Decisions regarding real property and other investments
This document appoints a person to deal with these financial issues on your behalf, in the event you are not capable of doing so. If your power of attorney is invoked, the person you appoint as your attorney can act on your behalf to ensure your estate is managed properly while you are unable to do so.
Choosing a trusted person to appoint in the event you are unable to make decisions is a difficult task. The lawyers at Crossroads Law can help you navigate the important questions to ask yourself to ensure that your estate documents meet your personal needs. Call or book online today for your free 20-minute consultation.