Does a power of attorney have to cost a lot of money?

I presented at an end-of-life seminar last weekend. An attendee reported at least one law firm is charging $500 for a power of attorney.

That might be good value. I haven’t done the market research to find out what lawyers typically charge.

Last week, I shared how you can create a legal will in a pinch, without a lawyer. Can you do the same with a power of attorney?

Yes. Follow this link to an excellent two-page information bulletin about powers of attorney, published by the Province of British Columbia.

In that bulletin is a link to a web page titled “Incapacity planning” that contains links to various free forms. For the power of attorney form, click here.

You’ll need a lawyer or notary to witness parts of the form for it to be effective for land transactions, but if that isn’t required and you follow the instructions on the form, you will end up with a fully effective power of attorney without paying any money.

There is however a caution. I recommend you consult a lawyer about your will and power of attorney, even though it’s possible to create them without a lawyer’s help.

There are all sorts of limitations to the basic—though legal—self-made will I wrote about last week. In a future column, I’ll discuss the value a lawyer can provide by drafting a will with clauses that fit your particular circumstances and wishes. Likewise, the free form for a power of attorney is also legal, but it has limitations.One limitation has to do with land transactions, even if you involve a lawyer or notary to witness the necessary portions of the form.

British Columbia law provides a default that the land transaction power of a power of attorney expires after three years. A lawyer would add a clause to the document to remove that default.

Another restricts your attorney’s power to give gifts, loans and charitable donations.

British Columbia law puts a default limit on how much your attorney can give or loan on your behalf to $5,000 per year (or 10% of your income, whatever is less).

You might want your attorney to continue financially supporting a grandchild’s education, as well as charitable organizations you have supported, which might far exceed $5,000 per year. That limitation can be removed as well by adding a clause to the document.

There are other additions to the basic form that can be of significant value. Consult a lawyer for a power of attorney that best suits your particular circumstances and wishes.

But back to the readily available and free form. It’s an “enduring” power of attorney, containing the necessary clause allowing your attorney to continue after you have lost the capacity to make financial decisions for yourself.

Armed with it, the person you appoint has dramatic power. They could liquidate your investments and sell your real estate.

That’s wonderful if was to be done so is under your specific instruction, or, if you’re no longer capable of managing your financial affairs, it’s in your best interests but not if you’ve appointed someone unworthy of your trust. So, please take great care.

Would you have attended the end-of-life seminar I presented last weekend? E-mail me if you’d like notifications of future events. Consider connecting with me on Facebook where I announce such things. I’ll try to remember to include notifications in future columns as well.

Next week, I will talk about representation agreements as I’ve done with wills and powers of attorney. Tune in for a link to free forms and a discussion about what representation agreements are all about.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.