Power of Attorney
A Power of Attorney is written authorization given by one person (the “Grantor”) to another (the “Attorney”) which empowers the attorney to act on behalf of the Grantor.
Powers of Attorney are effective only during the lifetime of the Grantor and cease to be of effect on death, unlike a Will which is only effective on death.
In the event you become incapacitated, a Power of Attorney will guarantee that your decisions will be handled by someone you trust and at a lower cost to you.
There are two types of Powers of Attorney: a Power of Attorney for Property and and Personal Care.
A continuing power of attorney for property authorizes a person to manage your property (realty, finances) if you become incapable of managing them. “Continuing” means that the power continues to be effective even if you are mentally incapable.
You can also place conditions or restrictions on the decisions that your attorney is authorized to make.
A power of attorney for property does not allow your attorney to make decisions about your personal care (ie where you will live, the medical care you will receive). If you want someone to have the authority to make those kind of decisions you must also have authority for personal care.
Full authority for property comes into effect when signed unless stated otherwise. To make the power of attorney for property to be effective after the grantor becomes incapable of managing property, the document must specifically state this.
The power of attorney must be executed in the presence of two witnesses who also sign. Certain persons cannot act as witnesses (ie spouse of the grantor or the attorney, a child of the grantor, minor)
A power of attorney for property may set out conditions and restrictions which may limit authority. If incapacity is a trigger for the effectiveness of the document, how that is determined must be set out in the document. The power of attorney for property document may specify an amount of compensation.
If the document is silent, the Act provides annual compensation may be taken in accordance with a prescribed fee scale (3% of capital receipts and income receipts, 3% of capital and income disbursements and a management fee of 3/5 of 1% of the annual average market value of the assets).
An attorney has an obligation to find and read the grantor’s will to be sure as much as possible that the attorney does not inadvertently liquidate assets given in the will or destroy the grantor’s estate plan. The Act prohibits the attorney disposing of property given in the will unless the sale is required to support the grantor.
An Ontario power of attorney may not be effective in other jurisdictions and you should consult with a lawyer in that jurisdiction – you made need a separate power of attorney ( be careful not to revoke the Ontario power of attorney.)
A power of attorney for personal care authorizes a person to make personal care decisions (health care,diet, clothing, housing, hygiene, safety, etc.) if you are mentally incapable of making those decisions. You can specify certain instructions in your power of attorney for personal care. (For example if you don’t want certain types of medical treatments you can specify this in your power of attorney for personal care.)
A power of attorney for personal care comes into effect only when you become mentally incapable of making some or all of your personal care decisions.
An Attorney for personal care is not the same as a living will. A living will is a written expression of your wishes about your care. It does not name a specific person to make decisions. The power of attorney for personal care names a specific person to be your decision-maker. It can also include your wishes about your personal care, but this is not required. If you have a power of attorney for personal care you may also have a living will. If you have both, the decision maker named in your power of attorney for personal care must follow the wishes specified in your living will. You may also specify those wishes in the power of attorney for personal care without having a living will.
What if I do not have a Power of Attorney?
If you do not have a Power of Attorney for Property and you become incapacitated, the Office of the Public Guardian and Trustee will manage your affairs until a court application is made authorizing someone else to manage your affairs.
If you don’t have an Attorney for Personal Care the Health Care Consent act provides for other substitute decision makers. Be aware that the person with a prior right to act as your decision maker may not be the person you would like to make decisions on your behalf.
The Office of the Public Guardian and Trustee applies for guardianship only as a last resort when there is no one else willing to assume the responsibility. It is not mandatory to have a power of attorney. It is a powerful document and gives the attorney a great deal of authority.
If you do become incapacitated, however, it can prove to be a very valuable document and one which can save you and your family a great deal of time, money and many problems!
Peggy Golden and Golden Law Office can assist you in preparing your Powers of Attorney for Property and Personal Care. Click here to contact us and discuss your wishes.