Bearing other people’s burdens

It might feel like an honour to have a family member or friend place tremendous trust in you to be their voice when they can no longer speak for themselves.

Whether they’re physically or mentally unable to do so, or deceased, being in charge of fulfilling their wishes often can’t be fully grasped by those taking on the roles of executor of their will or power of attorney.

These important jobs may not be the most onerous on the planet, but for the uninitiated, they probably involve more twists and turns than anticipated.

There’s not many playbooks on how to be an executor or serve as the attorney-in-fact named in the power of attorney document, says Philippe Richer, lawyer and principal at TLR Law Office in Winnipeg.

“We spend a lot of time talking about why people should have wills, powers of attorney, and so on and so forth,” says Richer, who practices in this area of law. “But we spend very little time with the people named in the documents to tell them what it actually means to be appointed power of attorney or executor.”

A 2022 Ipsos survey found less than half of Canadians have a will and a little more than a third have appointed a power of attorney (PoA).

(That’s not even accounting for the need to appoint a proxy in a health-care directive document to make medical decisions for Canadians when they no longer can themselves.)

Still, there are millions among those who have done these estate planning basics, meaning there are millions of Canadians have agreed to take on these roles — executor, proxy and PoA — when the time comes.

“If I were accepting an attorney for property role, I would want to get advice for myself,” says Holly LeValliant, a Toronto-based estate and trust consultant with Scotia Wealth Management.

Questions to asks might include:

— How do I perform these duties properly?

— What is my responsibility to this person who’s vulnerable?

— How do I protect them?

— Equally important: how do I protect myself from potential liabilities?

Another place to start is with the government of Manitoba, which offers a guidebook that generally addresses many concerns individuals may have about these roles.

Of course, those appointing these powers should first ask the individuals they have in mind for these roles is they truly want to do the job, Richer says.

Many people name their spouse attorney-in-fact, but they also should name an alternate — who should definitely be aware they’re being nominated for the job.

“We usually advise choosing a younger alternate,” he says. “If you name somebody who’s the same age as you, they may become incompetent at the same time you do.”

Most power of attorney documents today involve an ‘enduring power of attorney.’

That’s opposed to a ‘springing power of attorney’ whereby the powers only come into effect after someone is deemed incompetent.

This may seem reasonable, but Richer says getting someone declared mentally incompetent can be a long process, requiring a physician to declare the person unable to handle their affairs.

With enduring power of attorney, the attorney-in-fact only requires the actual document. It still sets out triggering events like incapacity, but it can be invoked gradually by a competent donor, he says.

“In practical terms, it means that if you’re competent and you’re doing everything you’re supposed to do, the person named attorney doesn’t need to worry about anything.”

Ensure the people appointed in these roles know where the actual documents are kept because financial institutions, for example, will not authorize access to a bank account without the originals.

Ideally, you should keep the actual copies in a safe deposit box. People serving in these roles should know its location as well as where the keys are kept.

For aging parents, have regular discussions with each other and other stakeholders — i.e. adult children — to avoid confusion when the time comes to use these documents, says Mariska Loeppky, assistant vice-president of tax and estate planning at IG Wealth Management.

“Older generations often don’t want to share exactly how much taxable income they have or how much they want to donate to charity, for example.”

She suggests philanthropic individuals consider setting up foundations or donor-advised funds — basically mini-foundations — whereby charitable money is invested for the long term and donated on a sustainable basis. This money will flow outside of the estate upon death, and these structures essentially remove philanthropic concerns off the to-do list for the executor at least, she adds.

Some people have no one they trust to fulfill these roles. That’s where trust companies — which most financial institutions offer — enter the picture. They can serve as executors and attorneys for property. (They will not act as a health-care proxy.)

For people appointed in these roles, some preparation can make life easier. Besides knowing the location of the documents, they should familiarize themselves beforehand with their contents if possible.

Failing that, adult children should talk to their parents, for instance, ask their aging parents about their intentions for care and in death, Loeppky says. “You can simply ask, ‘Would you like some help?’”

Visit their advisers with them, and try to gradually take on more of their financial affairs, Richer says. “It can happen quite naturally when you get involved that way.”

Don’t be afraid of over-communication. It can help avoid misunderstandings, LeValliant says.

“You don’t want anyone ever to say that you didn’t tell them what was going on or did something against a loved one’s wishes.”

Joel Schlesinger is a Winnipeg-based freelance journalist

joelschles@gmail.com