POAs Are Just As Important As Your Will!

A recent CBC article uses real-life situations that families have faced when medical issues arise. The story clearly highlights the need for having a Power of Attorney (“POA“) so your loved ones can make medical decisions for you, and take care of your financial needs, including your business. (https://www.cbc.ca/radio/whitecoat/power-of-attorney-canada-1.7086725)

The reality is that while many people have wills, it is the power of attorney that can often be just as important. While we all hope that our deaths will be quick and painless, this is often not the case. Medical science is prolonging life every day, but the consequence of that is that people can carry on long after they are able to manage their affairs or make decisions for themselves. This article should serve as a wake-up call; if you do not have a POA and a Will, you need to get on that. If you have one and you have not looked at it in a while, you need to determine if your life has changed and you need to update your documents. 

Two real-life situations involving POAs from my own practice come to mind. The first was a client who had split with his spouse, but had not completed the divorce due to ongoing litigation and ill-will. He had been working overseas for years and had a new common-law spouse whom he lived with outside of Canada. When he suddenly fell very ill in Canada, it was his not-quite-ex-wife who still held the POA. The situation was far from optimal, obviously. He had adult children whom he could have named, or even the new common-law spouse, but it was his ex (who hated him) who had the power to “pull the plug”. In this case, everyone agreed on what he wanted and needed to be done, so no drama ensued, but the potential for disaster was very much there. 

The second case involved a long-standing client who named me as the POA because he had no-one else in his life. If your tax lawyer is the closest person to you, it’s a sad situation. Normally I do everything I can to avoid being named as POA or god-forbid, estate trustee or executor! If people ask me to be the attorney or executor my response is always “I thought we were friends? I though you liked me? Why would you want to do that to me?” But in this case, I had no choice, and it was a good thing. He went into hospital with what quickly became terminal cancer. The client had trust issues, so he did not trust the doctors and nurses not to just let him die to get the bed for someone else. As a result, he refused to be put on a “Do Not Resuscitate” order or “DNR” on his file. Generally speaking, if you are nearing the end of life, a DNR is a good idea because resuscitation is not like they show on TV; ribs get broken at a minimum and more often than not people do not come back mentally all the way.

However, the client did not want the DNR. His doctors called me in and said, “Mr. X is having delusions of grandeur, is being rude to and difficult with staff, and he is acting paranoid because he says he does not trust the doctors and nurses. These are all obviously signs of dementia related to his condition. The POA you have on file naming you requires the approval of two doctors to agree that he is not able to make his own decisions, and we are willing at this time to give you that approval, so you can implement a DNR.” The medical staff did not wait for me to ask, they were asking me to invoke the POA so they would not have to use heroic measures. I responded, “If Mr. X starts being humble, nice, easy-going and trusting, then please contact me to discuss this issue again. But as long as he is being arrogant, rude, difficult, annoying and very paranoid, then I know my client is still in there and the lights are still on. So, no I am absolutely not invoking the POA and you can stuff your DNR!” The look on the doctors’ faces was priceless… In the end, the DNR was not necessary, and he passed peacefully. Putting on a DNR definitely would have been the right decision for virtually anyone else, but not Mr. X, and I was not going to let the doctors use the POA to get what they wanted. 

The moral of these stories is that you need to have the right person on your POA to make sure they are making the right decisions (or not making them) for you. Please review your Will and POAs to ensure that they are up to date and the people named understand your wishes. Please do not hesitate to contact Dominion Tax Law to discuss your situation.