Power of Attorney: what every homeowner needs to know

Anyone with significant assets (such as property) should be aware of the phrase “Power of Attorney”. Not to be confused with an attorney at law or a lawyer, Power of Attorney is a legal document that allows a principal owner of assets to assign an individual (known as the attorney or agent) the power to represent the principal in legal and financial transactions.

These authorizations are usually provided for specific circumstances, rather than as an all-encompassing permanent appointment. For example, the terms can be defined to provide power only when a principal is out of the country, or undergoing extensive medical treatment. As such, Power of Attorney is often assigned to take place only if the principal becomes mentally incapacitated in order
to ensure that ongoing decisions can be made to manage a principal’s estate if he or she is unexpectedly incapable. However, it is important to know that a Power of Attorney can not be used if the principal dies, as other legalities (such as a Will) become effective.

If you are a homeowner, even if you are in good health, now might be the right time to talk to your family about appointing Power of Attorney to an appropriate individual, just in case you are suddenly unable to do so.