Power of Attorney

I. What is a Power of Attorney?

A Power of Attorney is a written legal document by which you give a trusted friend/relative (they become your "attorney") the ability to do things with your money and your property that usually only you can do (the "power"). This does not mean that you cannot still do these things—only that someone else can do them besides you.

You can give the Power of Attorney to more than one person and require that they all make decisions and act together ("jointly"). In the alternative, you can allow them to make decisions and act separately ("jointly and severally").

The power given can be a very broad power (a "general" power) or you can restrict the power to certain isolated tasks (a "specific" power).

When you give the Power of Attorney, it can be immediately effective or you can specify a "triggering event" that will cause it to take effect.

A Power of Attorney must comply with certain legal requirements (properly "executed") to be considered a valid legal document. You can make a Power of Attorney yourself but they are inexpensive to have prepared by a lawyer compared to the costs that can result down the road if they are improperly executed. A document prepared by a lawyer may be easier to use when dealing with banks, insurance companies, etc.

A Power of Attorney may be revoked in writing at any time provided that the revocation is properly witnessed. A Power of Attorney is only valid as long as you are alive. When you die, your Will takes effect and any Powers of Attorney terminate.

II. Why Should I Give a Power of Attorney?

There are many reasons to give someone a Power of Attorney. If you are leaving the country on an extended holiday or business trip, you may want to leave someone the power to handle your affairs while you are absent. Anyone can instantly become incapable of managing their property due to an accident. Powers of Attorney are essential for long-term planning in the face of the onset of a known debilitating or terminal illness.

If you have not given someone a Power of Attorney, they may have to resort to going to court to obtain the same power if you suddenly become unable to manage your affairs ("incapable"). This can be very expensive and time consuming.

Some advance planning, such as maintaining joint bank accounts or owning property jointly, can help alleviate problems but some events are unforeseeable or cannot be planned for other than through a Power of Attorney.

For example, Ontario law requires that, when property owned by someone who is married is sold, both spouses must sign the Transfer/Deed of Land though only one spouse may be the actual owner registered on title. A person who is incapable cannot sign such a document. The capable spouse must either have a valid Power of Attorney or an Order from a court to sign on behalf of the incapable spouse.

III. Changes of the Law

The Substitute Decisions Act is part of a package of legislation that became law in 1992 was proclaimed in force on April 3, 1995.

A Power of Attorney made before the proclamation will be valid if

  1. it contains a statement that "it may be exercised during any subsequent legal incapacity" of the person who gave it (the "grantor"); and
  2. it is validly executed under the current laws.

This law a middle layer to the previous scheme and allows a family member to obtain a Power of Attorney for an incapable person through an administrative process called "Statutory Guardianship". The process of going to court to obtain the power will be a last resort that will not often be used.

The Statutory Guardianship procedure is faster and cheaper and will be administered by the Public Trustee. The Public Trustee may require a security bond to be posted by the attorney appointed through this process. In addition, the attorney will have to file a management plan and an annual financial statement.

The law sets out a clear list of conditions that must be met in order for a person to give a Power of Attorney and requires two witnesses rather than the one currently needed.

The law also allows people to make Living Wills (otherwise known as "Powers of Attorney for Personal Care" or "Health Care Directives" or "Powers of Attorney for Health Care"). These will allow people to give legally binding instructions about who will make decisions about health care and what types of health care they wish to have should they become incapable. These documents should be made in conjunction with your health care professionals and with attention paid to specific medical, religious and philosophical beliefs of the individual involved.