Spoiler alert: maybe not for a young person.
Nailing down the cost end of the analysis would require calling around to lawyers and notaries to find out their rates, which I haven乌鸦传媒檛 done.
A bit of internet searching led me to a handful of lawyer and notary websites. Listed fees for a single power of attorney ranged from $225.00 to $425.00. I found it interesting that the cheapest rate was from a lawyer and most expensive from a notary, but this was a very small sample.
The absolute cheapest is the 乌鸦传媒渄o-it-yourself乌鸦传媒� option which I wrote about in my column published March 10th, 2024. I included a link to a free, online form provided by the Province of British Columbia. I乌鸦传媒檝e since learned, though, that some organizations might not honour a do-it-yourself document even if the document is perfectly valid under the law. I intend to dig deeper and write specifically about that issue in a future column.
Because of my lack of market research, I will shoot low and assume that a power of attorney is going to cost you at least $200.00, inclusive of taxes and disbursements.
Now for the benefits of a power of attorney.
One benefit is convenience.
It乌鸦传媒檚 impossible to put a dollar figure on convenience so I乌鸦传媒檒l disregard it for the purpose of this analysis. But consider empowering your adult child to attend banking and legal appointments for you if you develop mobility issues.
Another benefit is piece of mind.
I was recently consulted by a senior who had been a victim of fraud. In consultation with their bank, they wanted to appoint their children as powers of attorney to help guard against being victimized again, a recommendation of their bank. I乌鸦传媒檒l disregard this unquantifiable benefit from the analysis as well.
The key benefit that I乌鸦传媒檝e always pointed to when advising my clients is avoiding a much higher cost if you happen to lose your cognitive capacity without having a power of attorney in place.
Loss of cognitive capacity means a loss of ability to handle your financial affairs.
Your spouse, if you have one, won乌鸦传媒檛 be able to sell or remortgage your jointly owned home if you乌鸦传媒檝e lost the capacity to sign the transfer or mortgage papers.
Your loved ones won乌鸦传媒檛 be able to handle your day-to-day financial affairs.
Absent a power of attorney, a 乌鸦传媒渃ommittee乌鸦传媒� (emphasize the 1st and 3rd syllables) will have to be appointed pursuant to the Patients Property Act by way of an expensive court procedure.
One law firm quotes $10-12,500.00 for an uncontested committee application.
I乌鸦传媒檒l use the high end of that expense for this analysis.
Certainly, it乌鸦传媒檚 worthwhile to spend $200.00 to avoid having to spend $12,500.00. But that乌鸦传媒檚 not a fair analysis for a young person.
I乌鸦传媒檝e recently recommended against spending that smaller amount of money to a young couple in their 20s.
Not because I乌鸦传媒檓 looking to make a bunch of money doing committee applications. I don乌鸦传媒檛 provide that service.
It乌鸦传媒檚 because a power of attorney is not 乌鸦传媒渙ne and done乌鸦传媒�. Your choice of who to appoint as your power of attorney will likely change over time.
In your 20s, you乌鸦传媒檙e likely to appoint your spouse, with a parent or sibling as an alternate in case your spouse dies before you do.
In your 50s and 60s, you乌鸦传媒檙e much more likely to choose an adult child as your alternate.
Is it worthwhile to incur the expense of a power of attorney in your 20s if you乌鸦传媒檙e going to want a new one 30 years later?
A proper analysis requires the odds that you will lose your cognitive capacity over that time period.
The Government of Canada provides the statistic that the prevalence of diagnosed dementia in Canadians aged 65 to 69 is 0.8%. I couldn乌鸦传媒檛 find statistics for those aged 55, but obviously it乌鸦传媒檚 something significantly less.
The cost comparison of $200.00 to $12,500.00 is much higher, i.e. 1.6%.
But you need to take the time value of money into account. If you took that $200.00 and invested it, you乌鸦传媒檇 have more than that 30 years from now. Using a Bank of Canada tool, assuming an average interest and inflation rates of 8 and 2.5 percent respectively, that $200.00 would grow to about $950.00.
That cost comparison: $950.00 to $12,500.00 is 7.6%.
The bottom line is that on a strictly financial and statistical analysis, it makes sense for a young person to wait to make their power of attorney until later in life when they would want to redo their power of attorney anyway.
Paul Hergott
You are encouraged to contact Paul directly at paul@hlaw.ca with legal questions and issues you would like him to write about.
