While the curve of COVID-19 has been flattening, in some Canadian cities cases are on the rise among one unexpected group: young people in their 20s. Being young and healthy, they may never have thought about a Power of Attorney until now. Treva Newton, a Tax and Estate Planner with TD Wealth in Victoria, B.C., joins Kim Parlee to talk about why you are never too young to have a Power of Attorney.
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- While the curve of COVID-19 is flattening in some Canadian cities, cases are on the rise in one unexpected group, those people who are younger and in their 20s. Those people have never thought about a power of attorney perhaps until now. Treva Newton is a tax and estate planner with TD Wealth. She joins us from Victoria, British Columbia, for this Ask MoneyTalk. And the question is, Treva, are there benefits to having a power of attorney if you are young and healthy?
- Yes, there are. It does't matter how old you are to have a power attorney. Even in your 20s, you should be looking at having one. It's always a good document to have in place. It will give your family and yourself peace of mind knowing that things can be taken care of.
And a power of attorney, we're talking about one here for finance. There's a couple different types. It allows somebody to make financial decisions for you if you're unable to, and it's very important to have, particularly if something happens to you.
- Yeah, you mentioned the one we're talking about is for finance, and it gives people permission to manage your financial affairs if you're incapacitated, but that's not the only kind. There's a few other kinds as well.
- Yes, there is. You have the power of attorney for financial decisions. You also have one to make health care decisions for you. Depending on your province will depend on what that's called. In British Columbia, it's called a representation agreement, and that allows somebody to make health care decisions for you if you're unable to.
And given this time that it is potential that people are possibly going to end up spending some time in a hospital, you want to make sure that you have somebody appointed who can make financial and health care decisions for you.
- Another kind is a power of attorney for property.
- Well, that would be the financial one, right? So that would be looking after any kind of finance, which would include your house, your bank accounts, doing your tax returns for you, all of those sort of financial things.
- Now let me ask you, who makes a good power of attorney? How do you choose?
- Yeah, it can be challenging who to choose as your power of attorney. You want to make sure you choose somebody that you really trust, right? Finances-- this person is going to be making all your financial decisions for you and have control of your assets. So first of all, you want to make sure you trust them.
Second of all, you want to make sure that they're going to be close by, definitely within Canada for that so that they don't cause any tax issues for you.
And depending how old you are, it will probably depend on who you end up appointing. So if you are in your 20s, earlier, you may end up appointing your parents because it would probably make sense that you're going to trust them to make these decisions for you. But as you get older, you may have to look at who you're choosing because your parents may not make sense anymore. So maybe you're going to choose a sibling, a cousin, a friend, something like that.
- And I'm assuming, though, this probably isn't an issue if you're younger, but choosing somebody much older could also present an issue as well.
- Right. So like I said, depending how old you're going to be and how old you are at the time would depend on who you appoint. So somebody who's in their 70s will probably appoint their children. That would make sense-- or somebody younger if they don't have children. And if you don't have anybody who makes sense to appoint, there are trust companies, other professionals who you could appoint for the power of attorney being for financial role.
- Treva, thanks very much.
- You're welcome.
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- Yes, there are. It does't matter how old you are to have a power attorney. Even in your 20s, you should be looking at having one. It's always a good document to have in place. It will give your family and yourself peace of mind knowing that things can be taken care of.
And a power of attorney, we're talking about one here for finance. There's a couple different types. It allows somebody to make financial decisions for you if you're unable to, and it's very important to have, particularly if something happens to you.
- Yeah, you mentioned the one we're talking about is for finance, and it gives people permission to manage your financial affairs if you're incapacitated, but that's not the only kind. There's a few other kinds as well.
- Yes, there is. You have the power of attorney for financial decisions. You also have one to make health care decisions for you. Depending on your province will depend on what that's called. In British Columbia, it's called a representation agreement, and that allows somebody to make health care decisions for you if you're unable to.
And given this time that it is potential that people are possibly going to end up spending some time in a hospital, you want to make sure that you have somebody appointed who can make financial and health care decisions for you.
- Another kind is a power of attorney for property.
- Well, that would be the financial one, right? So that would be looking after any kind of finance, which would include your house, your bank accounts, doing your tax returns for you, all of those sort of financial things.
- Now let me ask you, who makes a good power of attorney? How do you choose?
- Yeah, it can be challenging who to choose as your power of attorney. You want to make sure you choose somebody that you really trust, right? Finances-- this person is going to be making all your financial decisions for you and have control of your assets. So first of all, you want to make sure you trust them.
Second of all, you want to make sure that they're going to be close by, definitely within Canada for that so that they don't cause any tax issues for you.
And depending how old you are, it will probably depend on who you end up appointing. So if you are in your 20s, earlier, you may end up appointing your parents because it would probably make sense that you're going to trust them to make these decisions for you. But as you get older, you may have to look at who you're choosing because your parents may not make sense anymore. So maybe you're going to choose a sibling, a cousin, a friend, something like that.
- And I'm assuming, though, this probably isn't an issue if you're younger, but choosing somebody much older could also present an issue as well.
- Right. So like I said, depending how old you're going to be and how old you are at the time would depend on who you appoint. So somebody who's in their 70s will probably appoint their children. That would make sense-- or somebody younger if they don't have children. And if you don't have anybody who makes sense to appoint, there are trust companies, other professionals who you could appoint for the power of attorney being for financial role.
- Treva, thanks very much.
- You're welcome.
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