Power of Attorney Legal Services

Wealth planning is important for those of you who are concerned about your family’s future and want to ensure that lack of planning will not result in unnecessary hardship in the event of an unforeseen event, such as disability or premature death. Regardless of your particular set of priorities, the only way you can ensure that your wishes will be carried out is by structuring a plan. Consideration should be given to financial, disability, estate, and insurance planning to achieve your objectives most optimally.

The Importance of Having Powers of Attorneys

Power of Attorney and Last Will and Testament is not the same. Your Last Will and Testament covers the distribution of your property after you die and only takes effect upon your death. A Power of Attorney only applies while you are alive and ceases to be effective upon your death. Making a Power of Attorney is voluntary, and there is no requirement to register this document with the government. It is a good idea to have your Will and Powers of Attorney prepared and stored together so that the transition between incapacity and death is seamless. These documents are important for your overall estate plan.

A power of attorney or POA is a legal document in Ontario that gives someone you trust the authority to make financial and medical decisions on your behalf should anything happen to you, and you can no longer look after matters on your own. POA is possibly the most important document in your wealth plan. It allows you to appoint someone to act on your behalf (“attorney”) concerning your property or personal care if you cannot make decisions due to illness or disability. Some of you may feel that it is unnecessary for you to have POAs since you have a Will. However, did you know that your Will only takes effect when you die. As such, your personal representatives named in your Will do not have any authority over your affairs while you are still alive. If you do not have any Power of Attorney, your family members will have to apply for a court order appointing them as your attorney, a process that can cost several thousand dollars. Like any important legal document, you should not wait until unforeseen circumstances force you to hastily prepare your Powers of Attorney. It should be prepared and signed while you are in good health and can make the right decisions.

There are three types of Powers of Attorney: A Continuing Power of Attorney for Property, a Non- Continuing Power of Attorney for Property, and a Power of Attorney for Personal Care.

A Continuing Power of Attorney for Property is limited to financial matters and used in estate planning. It covers financial affairs and allows the attorney(s) you name to make decisions for you should you become mentally incapable, such as paying bills, applying for benefits, collecting income, monitoring investment portfolios, and ensuring assets are otherwise protected. Although the CPOA may be as specific as you want, it should be broad enough for your attorney(s) to carry out your wishes and manage your financial affairs effectively.

A Non-Continuing Power of Attorney for Property or a Special Power of Attorney gives the attorney authority for a limited set of actions under a restricted set of circumstances—such as buying or selling a home, withdrawing or depositing money from an account, or running a business, for a limited timeframe. In a real estate context, a Power of Attorney for Property can be used where one of the parties to the agreement of purchase and sale is unavailable to execute legal documents on closing. In such a case, this party can appoint an attorney by way of Power of Attorney for Property to act on their behalf with respect to this transaction. It may be used in a situation where you are travelling and away from home for an extended period of time.

A Power of Attorney for Personal Care is limited to medical and personal care matters. An attorney for personal care has authority only concerning health care, nutrition, shelter, clothing, hygiene, or safety.

A Power of Attorney for Personal Care becomes effective when a qualified assessor, appointed by the provincial government, confirms that the donor (person appointing an attorney) cannot make personal care decisions.

A Power of Attorney for Property takes effect immediately, i.e., Your attorney will be able to use the POA as soon as it is signed and witnessed unless you say otherwise in the document. If you wish, your POA will only come into effect once you have been determined to be incapable of managing your property. If you choose this, how your incapacity will be determined should be dictated in the document.

Preparing Powers of Attorney

Although the law does not require it, we recommend that your lawyer prepare your Power of Attorney. Attempting to draft a Power of Attorney yourself is a risk. Errors, omissions, inaccuracies, or contradictions in the self-made Power of Attorneys can result in expensive and time-consuming litigation, frustrating and even destroying family relationships.

Appointing an Attorney

The attorney is the person appointed in your Power of Attorney to carry out its terms and instructions. The attorney can be, for example, a spouse, child over the age of majority, relative, friend, acquaintance, or a combination of these. It is crucial to choose your attorney carefully. A trusted relative or family friend is the most appropriate choice, as this person may be called upon to exercise considerable discretion when administering your affairs. It is important to choose someone who is a resident of Canada (and preferably a resident of Ontario), who is trustworthy, responsible, and who has knowledge of your affairs. It is also important to ensure the attorney is willing to assume these duties and is aware of your affairs.

In cases where individuals do not have Power of Attorney, in these circumstances, a family member has the right to make your health care decisions or apply to become your “guardian” of property. Alternatively, someone like a close friend - could apply to make decisions for you in these matters. If you do not have a spouse, partner, or relative who is prepared to make an application to the Court to become your court-appointed guardian, and an assessor has issued a certificate of incapacity, the government (Public Guardian and Trustee) will become your guardian over your property or personal care or both, depending on the circumstances. Through the Office of the Public Guardian and Trustee (OPGT), the government acts only in situations where it is legally required and where no other suitable person is available, able, and willing.

For the POA to be legally binding, you must have the legal capacity to give the POA; the document must be completed correctly, signed, and witnessed by two eligible individuals to serve as a witness. (For example, your spouse and children are not allowed to serve as a witness to you signing the POA).

If you would like to revoke the POA, the revocation must be done in writing and executed in the same way as a continuing power of attorney. After the revocation form has been executed, you must notify all persons/corporations served with the power of attorney and all persons/corporations who might act upon the instructions of the attorney whose powers are being revoked.