Did you know1...
It may be to your benefit to have multiple powers of attorney (and wills)?
Under a power of attorney instrument, an adult authorizes another person (or institution – e.g., a professional trust company or the Public Guardian and Trustee of BC) to make decisions or do certain things on behalf of the adult in relation to the adult's financial affairs. The authority of a power of attorney instrument ends on the death of the adult.
Under a will, the will-maker authorizes another person (or institution) to be the executor of their estate – to gather in the will-maker's assets, pay the will-maker's debts, and distribute the will-maker's estate in accordance with the directions set out by the will-maker in the will. A will does not take effect until the death of the will-maker.
Depending on the nature of your assets, it may not make sense for the same person to be in charge of your personal interests and your industry-specific interests. For example, you may want to appoint your spouse or another family member as your attorney or as the executor of your will, but that person may not be well-suited to manage some of your assets in a specific industry. Consider:
- Complicated shareholdings where an experienced business owner could work with your professional advisors: Does your company have multiple classes of shares with varying rights and restrictions? Has your company issued options to employees or others, which will likely have varying dates when these options can be exercised? Are there outstanding warrants guaranteeing potential investors the right to purchase certain company shares at specific prices?
- Unique industry that would benefit from having someone who has worked in and understands the business: Do you operate a clinical practice? Is your business subject to specific and potentially detailed government regulations? Do the services or goods you provide to customers require specific knowledge and training from your staff to ensure business success?
- Specialized intellectual property ("IP") or an expansive IP portfolio that would be best overseen by someone with a related understanding: Does your business's success hinge on specialized IP, whether trademarks, copyright, patents, or know-how? Who will manage the required IP renewals? Who will ensure IP rights are properly defended and managed?
Separate appointments may be done by way of separate documents (e.g., one power of attorney that appoints one person and is limited to the management of your business or your IP assets, and another that appoints another person and applies to the balance of your affairs) or by including a provision within your document that a particular person is appointed to manage the administration of a particular asset.
If you have unique assets, consider having a separate document or provision to name a trusted colleague in that particular industry (or with particular expertise) to manage those assets for you or your estate.
Footnote
1 This is the sixth entry in our blog mini-series entitled "Did You Know", providing practical tips for navigating a variety of wills, estates, and trusts micro-issues.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.