A power of attorney is a significant element of Estate Planning that grants someone the legal authority to make decisions on your behalf in case you are unable to do so. Nobody would like to be unable to make financial or healthcare decisions. However, accidents or unforeseen events can occur at any point in life.
Through a power of attorney, you can plan ahead of time and take necessary steps to protect yourself and your loved ones. You can also designate someone trustworthy to make decisions on your behalf in case you become incapacitated.
- What Is a Power of Attorney?
- What Are the Types of Power of Attorney?
- Continuing Power of Attorney for Property
- Appointing Power of Attorney for Property
- Defining Property Decision-Making Authority
- Legal Requirements and Validity
- When will my Continuing Power of Attorney for Property come into effect?
- What Level of Mental Capacity is Needed to Make a Power of Attorney for Property?
- Revocation or Amendment of a Power of Attorney for Property
- Power of Attorney for Personal Care
- Continuing Power of Attorney for Property
- What are the Advantages of Having a Power of Attorney?
- What Happens If I Do Not Have a Power of Attorney?
- Appointing Multiple Attorneys: What You Need to Know
- Resigning as the Attorney for Property or Personal Care
- Summary
What Is a Power of Attorney?
A Power of Attorney is a legal instrument that provides someone you trust with the authority to make decisions on your behalf and manage your affairs. Ontario recognizes two main types of POA: the Power of Attorney for Personal Care and the Power of Attorney for Property. The former allows the attorney to make decisions about the grantor’s healthcare, housing, and other aspects of personal life if the grantor becomes mentally incapable of making these decisions themselves. The latter grants the attorney the authority to manage the grantor’s financial affairs, including handling bank accounts, signing cheques, buying or selling real estate, and managing investments, regardless of the grantor’s mental capacity, unless specified otherwise.
The legal framework governing the use of POAs in Ontario is designed to protect the rights and interests of the grantor while ensuring their wishes are respected, especially in situations where they are unable to make decisions for themselves due to illness or incapacity. For a POA to be valid in Ontario, it must meet specific requirements, such as being in writing and, in the case of a Power of Attorney for Property, signed in the presence of two witnesses who are not the spouse, partner, or child of the person making the POA. The creation of a POA in Ontario is a significant decision that requires careful consideration and planning. It is strongly recommended that individuals consult with a legal professional to ensure that the document is correctly drafted to reflect their wishes and complies with Ontario law, providing peace of mind that their affairs will be managed according to their preferences.
What Are the Types of Power of Attorney?
Ontario has two types of Power of Attorney documents: the continuing power of attorney for property and the power of attorney for personal care.
Continuing Power of Attorney for Property
Power of attorney for Property gives someone the authority to make financial decisions on your behalf, such as managing your bank accounts, paying bills, managing your investments, or selling your property if necessary. Power of attorney in Ontario is governed by the Substitute Decisions Act, 1992.
Appointing Power of Attorney for Property
The person you choose should be someone you trust, such as a family member, spouse, or long-time friend. Some prefer to choose a lawyer or trust company to act as their attorney. However, before appointing someone, it is suggested to discuss with them to ensure they are willing and able to take on this responsibility. Ensuring they understand how you want your financial affairs or personal care handled is also essential. Remember, you should never feel pressured to make someone your attorney. If you do not have anyone you are comfortable appointing, it is recommended that you speak to a lawyer about your options.
Defining Property Decision-Making Authority
If you don’t limit your attorney’s authority, they can make almost any personal decision you would typically make. A property attorney you assign has the lawful power to make decisions regarding financial affairs, including:
- Paying your bills
- Collecting money owed to you
- Maintaining or selling your house
- Managing your investments
The attorney must act in the best interests of the person they represent, according to their preferences.
Legal Requirements and Validity
To be considered valid and enforceable in Ontario, a power of attorney for property must adhere to specific legal requirements. These requirements include the grantor being mentally capable and at least 18 years old, the grantor’s signature or acknowledgment before two witnesses, and compliance with Ontario’s legal framework for power of attorney documents.
When will my Continuing Power of Attorney for Property come into effect?
Your attorney will be able to use the continuing power of attorney for the property as soon as it is signed and witnessed unless you say otherwise in the document.
What Level of Mental Capacity is Needed to Make a Power of Attorney for Property?
The following is required that you:
- know what property you have and its approximate value;
- are aware of your obligations to the people who depend on you financially;
- know what you are giving your attorney the authority to do;
- know that your attorney is required to account for the decisions they make about your property;
- know that, as long as you are mentally capable, you can revoke (cancel) this Power of Attorney;
- understand that if your attorney does not manage your property well its value may decrease; and
- understand that there is always a chance that your attorney could misuse their authority.
Revocation or Amendment of a Power of Attorney for Property
Revoking or adjusting your power of attorney for property can be considered because your preferences or situation might change over time. In Ontario, you have the legal right to cancel or modify your power of attorney for personal care whenever necessary. To cancel your power of attorney for property, you must state in writing that you are “revoking” it.
If you do not have an attorney for property, your family can still make some decisions on your behalf, but not all. In certain exceptional circumstances, it might be necessary for an individual to become your “guardian,” which is a time-consuming and expensive process that involves going to court.
Having a power of attorney is a proactive step that can help ensure your wishes are respected, and your affairs are handled according to your values and preferences. This essential aspect of Estate Planning might help you prepare for unforeseen and unpredictable circumstances while providing you with the peace of mind that your affairs will be taken care of by someone you trust in accordance with your wishes.
Power of Attorney for Personal Care
This type of power of attorney allows someone you trust to make decisions about your health care, personal needs (e.g., housing), and other aspects of your personal life, such as clothing and meals. It is important to communicate your wishes for these matters to your attorney for personal care in case you are unable to provide consent or decline medical treatment. For instance, some individuals might inform their attorney that they do not wish to receive life support if there is no hope for recovery.
Appointing Power of Attorney for Personal Care
The person you choose should be someone you trust, such as a family member, spouse, or long-time friend. Some prefer to choose a lawyer or trust company to act as their attorney. However, before appointing someone, it is suggested to discuss with them to ensure they are willing and able to take on this responsibility. Ensuring they understand how you want your financial affairs or personal care handled is also essential. Remember, you should never feel pressured to make someone your attorney. If you do not have anyone you are comfortable appointing, it is recommended that you speak to a lawyer about your options.
Defining Medical Decision-Making Authority
If you don’t limit your attorney’s authority, they can make almost any personal decision that you would typically make on your own. A personal care attorney you assign has the lawful power to make decisions regarding medical procedures, medication management, and treatments for individuals who cannot make decisions for themselves. The attorney must act in the best interests of the person they represent, according to their specified preferences.
Legal Requirements and Validity
A power of attorney for personal care must adhere to specific legal requirements to be considered valid and enforceable in Ontario. These requirements include the grantor being mentally capable and at least 16 years old, the grantor’s signature or acknowledgment before two witnesses, and compliance with Ontario’s legal framework for power of attorney documents.
When will my Power of Attorney for Personal Care come into effect?
Power of Attorney for Personal Care can only be used when someone is mentally incapacitated and unable to make their own personal care decisions.
Revocation or Amendment of a Power of Attorney for Personal Care
Revoking or adjusting your power of attorney for personal care can be considered because your preferences or situation might change over time. In Ontario, you have the legal right to cancel or modify your power of attorney for personal care whenever necessary. This flexibility allows you to change your healthcare preferences as your beliefs or circumstances evolve. To cancel your power of attorney for personal care, you must state in writing that you are “revoking” it.
If you do not have an attorney for personal care, your family can still make some decisions on your behalf, but not all. In certain exceptional circumstances, it might be necessary for an individual to become your “guardian,” which is a time-consuming and expensive process that involves going to court.
Having a power of attorney is a proactive step that can help ensure your wishes are respected, and your affairs are handled according to your values and preferences. This essential aspect of Estate Planning might help you prepare for unforeseen and unpredictable circumstances while providing you with the peace of mind that your affairs will be taken care of by someone you trust in accordance with your wishes.
What are the Advantages of Having a Power of Attorney?
Having a power of attorney has numerous benefits and protects your interests in case of incapacity or illness that impacts your ability to make financial or healthcare decisions. First, it allows you to choose the person/s who will make these decisions for you if you cannot do so yourself. This will ensure that your wishes are respected and the decisions that person will make align with your values.
Secondly, having a power of attorney might prevent conflicts and legal disputes in the family over decision-making power in case you become incapacitated. By designating the person you want to act on your behalf, you can reduce the risk of disagreements among family members.
Finally, knowing that your affairs will be taken care of in case of an unforeseen event might give you peace of mind. It allows you to plan ahead for the unexpected and ensure that your wishes are carried out while you cannot communicate them yourself. Especially for your decisions regarding specific care
What Happens If I Do Not Have a Power of Attorney?
Financial decisions require legal authority. Without a power of attorney, your family, including your spouse, is not automatically authorized to make financial decisions for you.
If you are unable to make decisions regarding these matters and do not have a power of attorney for property, an individual will have to seek court approval to act as your representative or a guardian will be appointed by either the Ontario government’s Office of Public Guardian and Trustee or the court. However, it might be a costly and lengthy process.
If you do not have an attorney for personal care, your family can still make some decisions on your behalf, but not all. In certain exceptional circumstances, it might be necessary for an individual to become your “guardian” which is a time-consuming and expensive process that involves going to court.
Having a power of attorney is a proactive step that can help ensure that your wishes are respected and your affairs are handled in accordance with your values and preferences. This essential aspect of Estate Planning might help you prepare for unforeseen and unpredictable circumstances while providing the peace of mind that your affairs will be taken care of by someone you trust in the light of your wishes.
Appointing Multiple Attorneys: What You Need to Know
While appointing an attorney to act on your behalf in your power of attorney, some people prefer to appoint a single individual as their attorney. However, there are instances where you might want to consider appointing multiple attorneys. This article aims to provide you with the information you might want to know about appointing multiple attorneys.
Why Appoint Multiple Attorneys?
Appointing multiple attorneys can offer various advantages. First, it provides a checks-and-balances system that can help you ensure that the attorneys act in your best interests. It might be imperative if the attorneys have different areas of skills and strengths. For example, one attorney may be experienced in financial matters, while another may have more free time to manage affairs.
Additionally, naming multiple attorneys can give you peace of mind. For example, if more than one person is given the authority to deal with financial matters, that can be convenient if one is out of town. The other ones can deal with these matters while he/she is away. It can also distribute the workload, preventing a single attorney from becoming overburdened.
Potential Pitfalls of Appointing Multiple Attorneys
While there are advantages to appointing multiple attorneys, there are also potential pitfalls. One potential issue is the risk of disagreements and disputes among the attorneys. If the attorneys disagree on a decision, it can create a stalemate that could harm your interests and cause delays.
Another issue that shouldn’t be overlooked is that if the attorneys must work together to make decisions, it may require more time and resources than if a single attorney were making the decisions.
Finally, it is crucial to consider the potential for confusion or miscommunication among the attorneys. The attorneys must be able to communicate effectively and work together to ensure that your interests are protected. Misunderstandings or miscommunications among the attorneys can lead to mistakes or unintended consequences.
How to Appoint Multiple Attorneys
If you have decided to appoint multiple attorneys, you should follow some key steps to have a smooth process. First, you should carefully consider which attorneys to name. You might want to choose attorneys with different skills and areas of expertise to provide a well-rounded approach to decision-making.
Second, if you intend for your attorneys to have separate specific powers, you can create two powers of attorney where the powers do not overlap. In this case, you should clearly define each attorney’s roles and responsibilities and the associated powers. This can help to avoid misunderstandings or disagreements later.
If you appoint more than one attorney, you can also include instructions in your power of attorney as to how a dispute or disagreement among the attorneys can be resolved, such as a majority decision.
Finally, it’s essential to communicate with all the attorneys to ensure that they understand their roles and responsibilities. It is also essential to ensure that they know your wishes and are willing to act in your best interests.
Resigning as the Attorney for Property or Personal Care
An attorney under a continuing power of attorney may resign, but if the attorney has acted under the power of attorney, the resignation is not effective until the attorney delivers a copy of the resignation to:
- The grantor;
- Any other attorneys under the power of attorney;
- The person named by the power of attorney as a substitute for the attorney who is resigning, if the power of attorney provides for the substitution of another person; and
- Unless the power of attorney provides otherwise, the grantor’s spouse or partner and the relatives of the grantor who are known to the attorney and reside in Ontario, if,
- the attorney is of the opinion that the grantor is incapable of managing property (applicable for Powers of Attorney for Property), and
- the power of attorney does not provide for the substitution of another person or the substitute is not able and willing to act.
If an attorney decides to resign, they must take reasonable steps to inform those they previously dealt with on behalf of the grantor and who may require further assistance on behalf of the grantor. For instance, if the attorney had registered a Power of Attorney with the grantor’s bank and had been managing the grantor’s bank account, they must inform the bank of their resignation. Likewise, if the attorney is handling the grantor’s care facility as an Attorney for Personal Care, they must notify the facility of their resignation.
Your resignation will only be deemed effective upon its delivery to all parties legally entitled to receive a copy, provided it is presented in an accessible format. Failure to deliver your resignation to any entitled party may make it invalid.
If the Power of Attorney document does not provide for a substitute Attorney, then the Power of Attorney will be terminated once the Attorney resigns.
Summary
Having a power of attorney is a proactive step that can help ensure that your wishes are respected and your affairs are handled in accordance with your values and preferences. This essential aspect of Estate Planning might help you prepare for unforeseen and unpredictable circumstances while providing the peace of mind that your affairs will be taken care of by someone you trust in the light of your wishes.
If you need a Toronto Wills and Estate lawyer to create your Power of Attorney, contact us today and see how we can assist.
The information provided above is of a general nature and should not be considered legal advice. Every transaction or circumstance is unique, and obtaining specific legal advice is necessary to address your particular requirements. Therefore, if you have any legal questions, it is recommended that you consult with a lawyer.
