Has it been a struggle getting your parents to downsize?
Or are you concerned about their health declining as they age, impacting their decision making?
It’s time to get familiar with the different Power of Attorneys available to you and your family, and what they mean.
It can be a challenge for your aging parents to handle the many meetings associated with selling the family home - their real estate agent, lawyers, and the bank. It’s especially difficult during such an emotional transition - walking away from a home that has brought them so many beautiful memories over the years.
Wouldn’t it be so much easier if you had the power to help them sign-off on selling?
A Power of Attorney (POA) is a legally binding document that gives an individual the right to buy or sell property on someone else’s behalf. It can be handed over to an individual or a corporation, and vice versa.
So, what do you need to know about POAs?
Let’s dive into the different types of POAs and how to make informed decisions about selling your family home (without making your parents feel pushed aside and emotionally drained).
What is a Power of Attorney?
With great power comes great responsibility.
A Power of Attorney (POA) allows you to make legal decisions about property or personal care on behalf of someone else, or an entity. In this case, a POA would allow you to make decisions about your family home. Your parents would sign over their decision making rights about their home to you as the seller.
In Ontario, there are 3 different types of Powers of Attorney:
- A non-continuing power of attorney for property
- A continuing power of attorney for property
- A power of attorney for personal care
A non-continuing power of attorney is limited to a specific length of time and specific tasks, i.e. just selling the family home and no other rights to assets. Your parents would specify for how long you’d be able to act on their behind and what tasks your allowed to take on.
A non-continuing power of attorney would be null and void if your parents were to become mentally unstable due to accident, injury, or declined health.
A continuing power of attorney would legally give you the right to manage multiple financial matters, specifically real estate, on behalf of your parents.
As someone’s continuing power of attorney, you would be able to take on:
- Bill payments
- Apply for benefits, collect pension, and other forms of income your parent/s are entitled to
- Monitor their investments
- Protect their assets, such as the family home
Your parents also have the option to have multiple powers of attorney handle their assets, for example, you and your siblings.
A power of attorney for personal care allows you to make healthcare decisions for another individual if they are unable to make decisions on their own.
If at any point during the validity of the POA, one or both of your parents (depending on if you have both parents with you or one) passes away, the POA would become invalid. Any further decisions would be based on their Will, if one has been made.
What happens after you’ve signed a POA?
Simply put, communicate who has signing authority for your parents to the right people.
Once you’ve decided if a POA is right for you and your parents, you’ll need to notify their real estate agent, lawyer and bank so they can prepare for the closing of your home and avoid possible delays.
It’s best if you take on the responsibility to assist your parents in communicating this to any associated parties to ensure things run smoothly. At the end of the day, that’s what this process is all about: making it easier on your parents.
Looking to talk out your options in assisting your parents with selling the family home?
Let’s chat about first steps and how we can make this process as smooth and simple as it should be.