Various legal issues can arise when an individual lacks the legal capacity to make certain decisions about their health, finances, and property. However, these issues may be mitigated by preparing a comprehensive estate plan that includes a Power of Attorney.
Appointing a Power of Attorney means designating another person to make decisions about your finances, property, and/or personal care if you are unable to do so on your own due to incapacity. The primary law governing capacity matters in Ontario is the Substitute Decisions Act and the Health Care Consent Act. The Substitute Decisions Act addresses property issues and governs substitute decision-making through powers of attorney, while the Health Care Consent Act specifically addresses decisions in the personal care, or health, context.
This blog post will cover five key things that you should know about powers of attorney in Ontario.
1. There are two types of powers of attorney in Ontario: a Power of Attorney for personal care and a Power of Attorney for property.
Appointing a Power of Attorney for personal care and/or property requires an individual to designate another individual who will be responsible for making decisions on their behalf if they become incapacitated. The individual preparing the Power of Attorney may also be referred to as the “grantor.”
Power of Attorney Requirements
An individual can choose to appoint the same person for both types of Power of Attorney, or they may choose to designate two different individuals. However, appointing someone as a Power of Attorney is not a decision that should be made lightly. When deciding who to appoint as a Power of Attorney, individuals should be mindful of certain requirements, which includes ensuring that the designated Power of Attorney is mentally capable of making such important decisions. Further, the designated power for property must be at least 18 years old, while a Power of Attorney for personal care must be at least 16 years old. It is also important to consider whether the chosen individual is willing and able to make such decisions and act in the grantor’s best interests.
Power of Attorney for Personal Care
The Health Care Consent Act sets out a hierarchy of decision-making individuals who may make health care-related decisions on behalf of someone else. The only decision maker ranked higher than a Power of Attorney is a legal guardian. This hierarchy is as follows:
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- Guardian of the person
- Attorney named in the power of attorney for personal care
- Representative appointed by the Consent and Capacity Board
- Spouse or partner
- Child or parent or person with a right of decision-making
- Parent with a right to parenting time
- Brother or sister
- Any other relative
- Office of the Public Guardian and Trustee
If there is no valid Power of Attorney for personal care or legal guardian, the highest-ranked decision-maker will make the necessary decision(s). If, for instance, an individual does not have a guardian, a Power of Attorney for personal care, a representative appointed by the Consent and Capacity Board, or a spouse, but has multiple living children, those children would need to select one person to be the decision-maker, or they may make decisions together. If they cannot agree on a decision, the Office of the Public Guardian and Trustee may be asked to step in.
Power of Attorney for Property
There is no similar hierarchy for property decisions. If there is no designated individual named as a Power of Attorney for property and an individual is incapacitated, the court will need to appoint a guardian. However, this can lead to disputes, legal expenses, and delays.
2. The individual preparing the Power of Attorney must be competent at the time the document is executed.
The Substitute Decisions Act sets out the competency thresholds required by a person who is seeking to prepare and execute a valid Power of Attorney for personal care or for property. It is important to note that these thresholds are different depending on the type of Power of Attorney being prepared.
Power of Attorney for Personal Care
A person appointing the Power of Attorney for personal care must understand whether the property attorney has a genuine concern for the person’s welfare, and must appreciate that the person may need to have the proposed attorney make decisions for them.
Power of Attorney for Property
Section 8(1) of the Substitute Decisions Act provides that a person seeking to appoint a Power of Attorney for property is capable of giving a continuing Power of Attorney if the person:
(a) knows what kind of property he or she has and its approximate value;
(b) is aware of obligations owed to his or her dependants;
(c) knows that the attorney will be able to do on the person’s behalf anything in respect of property that the person could do if capable, except make a will, subject to the conditions and restrictions set out in the power of attorney;
(d) knows that the attorney must account for his or her dealings with the person’s property;
(e) knows that he or she may, if capable, revoke the continuing power of attorney;
(f) appreciates that unless the attorney manages the property prudently its value may decline; and
(g) appreciates the possibility that the attorney could misuse the authority given to him or her.
The Power of Attorney must also be prepared without the undue influence of the proposed attorney or anyone else.
3. Powers of attorney must satisfy certain criteria in order to be effective.
To be effective, a Power of Attorney must be made in writing and signed in the presence of two witnesses. The witnesses must each be over the age of 18 and must not be the attorney or the attorney’s spouse or partner, the grantor’s spouse or partner, a child of the grantor, or a person whose property is under guardianship.
4. An appointed attorney must act in the best interests of the grantor.
In the property context, a Power of Attorney must act only in the best interests of the grantor of the Power of Attorney (the incapacitated person). The named attorney cannot consider the interests of the beneficiaries of the incapacitated person or their own interests and needs.
In the personal care context, the attorney must make decisions that are aligned with the previously expressed preferences of the grantor. If these wishes are not known, then the attorney must make decisions in the grantor’s best interests.
5. If you change your mind about your Power of Attorney, you must state in writing that you are “revoking” it.
If you change your mind about who you have appointed as your Power of Attorney, or your designated attorney is unwilling or unable to act in such capacity, you must state in writing that you are “revoking” the Power of Attorney. There is no special form required for this statement, which is referred to as a “revocation”; however, it must be signed by you and witnessed in the same manner that the Power of Attorney was.
Bader Law in Oakville Provides Trustworthy Advice and Comprehensive Estate Planning Solutions
The knowledgeable wills and estate planning lawyers at Bader Law understand the complexities and contemplations that accompany estate planning. Whether you are preparing your first estate plan, or are seeking to revise an existing power of attorney, our team can help. We can help you understand your legal options and ensure you and your loved ones are taken care of in accordance with your wishes. To speak with a member of our team regarding your estate planning needs, contact us online or call us at (289) 652-9092.