The Importance of Multi-Jurisdictional Powers of Attorney
By Samantha Wu
May 16, 2017
Many Canadians spend their winter months in sunnier U.S. states such as Arizona, California, or Florida. My most conscientious Canadian clients ensure that their estate and incapacity planning is in place prior to extended travels; I recommend that all clients draw up Powers of Attorney (“POAs”) for both health care decisions and property management as part of a comprehensive estate planning package. For snowbirds, however, I ensure that POAs are valid and effective in my clients’ province of residence and in the U.S.
Cross-Border Validity of Canadian POAs
Whether a Canadian POA is legally “valid” in a U.S. state is a complicated question. Each U.S. state, like each Canadian province, has legislation that lays out the basic criteria that must be met to create a valid POA. For example, the criteria often includes rules regarding the required method of execution. In Ontario, for instance, a POA must be signed, dated, and witnessed by two people who are not named in the document. In comparison, a Florida POA for property must be witnessed and acknowledged before a notary public.
Validity vs. Effectiveness
As many states have reciprocity/recognition rules in their POA statutes, a foreign POA may be recognized as valid if it complies with the laws of the jurisdiction where it was executed. However, it is important to distinguish between a document’s legal validity and its effectiveness. A POA is only useful if the institution (e.g., a bank or a hospital) where it is presented recognizes its authority. Although an Ontario POA may be legally valid under Florida law, a hospital in Florida may require an additional court order prior to taking instructions under an Ontario POA, decreasing the POA’s effectiveness by adding additional expense and stress.
Considerations and Next Steps
If you are spending significant periods of time in a U.S. state, it is prudent to consider executing POAs that are drafted in accordance with that particular state’s legislation to ensure their validity and effectiveness stateside. It is important to consult a cross-border attorney to ensure that your POAs are drafted and signed correctly and that they don’t unintentionally revoke your Canadian POAs.
