Often coupled with estate planning, incapacity planning is a key component to ensuring your wishes are protected when you lose the ability to make decisions for yourself. It is important to designate a substitute decision maker whom you trust to act in your best interests, and equally important to ensure this person is duly authorized to act on your behalf. The best way to do so is by way of appointment under a power of attorney.
What is a Power of Attorney?
A power of attorney is a legal document by which one person (the grantor) appoints another person (the attorney) to act on behalf of the grantor. In Ontario, there are two types of powers of attorney:
Continuing Power of Attorney for Property
A continuing power of attorney for property authorizes the named attorney(s) to do on the grantor’s behalf anything in respect of property that the grantor could do if capable, except make a will. This can include decision-making with respect to real property, dealings with financial institutions, and management of financial affairs. The “continuing” nature of the document allows the attorney for property to act on behalf of the grantor prior to and subsequent to the grantor’s loss of capacity. The powers conferred under a power of attorney for property cease upon the death of the grantor.
Power of Attorney for Personal Care
Unlike attorneys for property, attorneys appointed under a power of attorney for personal care may only exercise their powers upon the grantor’s incapacity. Attorneys for personal care are responsible for making all decisions concerning the grantor’s personal care including living conditions, medical treatment, personal hygiene, nutrition, and medical decisions in emergent situations. These attorneys are often close relatives of the grantor who have knowledge of the grantor’s care requirements and personal wishes. The powers conferred under a power of attorney for personal care also cease upon the death of the grantor.
Who becomes my substitute decision maker if I haven’t appointed an attorney?
Where an individual has failed to plan and has not made power of attorney documents for property and/or personal care decisions prior to losing the capacity to do so, a substitute decision maker is determined pursuant to the provisions of the Substitute Decisions Act, 1992.
For dealings with property, the Public Guardian and Trustee becomes the person’s statutory guardian of property upon receipt of a certificate of incapacity. This statutory guardianship may however be terminated if the person’s spouse, partner, relative, or a trust corporation applies to the Public Guardian and Trustee to assume the role of guardian of property. A successful applicant becomes the incapable person’s court-appointed guardian of property.
An individual may also apply directly to the Ontario Superior Court of Justice to have a judge appoint a guardian of property. The applicant must inform the person for whom guardianship is proposed about the application, what it means, and that they are entitled to participate in the process and be represented by a lawyer. An application to appoint a guardian of property must be accompanied by the proposed guardian’s consent, a management plan for the property, and a statement signed by the applicant indicating the person alleged to be incapable is aware of the application and their rights.
For decisions with respect to personal care, the court may, on any person’s application, appoint a guardian of the person for someone who is incapable of making personal care decisions. In granting such an appointment, the court will consider the incapable person’s wishes, if they can be ascertained, and the closeness of the relationship between the applicant and the incapable person. Only where there is no person available and willing to be appointed as guardian of the person can an application be made to propose the Public Guardian and Trustee as guardian, provided the Public Guardian and Trustee consents to the appointment.
Court-appointed guardian vs Attorney
While a court-appointed guardian can act as a substitute decision maker for the incapable person, there are several drawbacks to having a court-appointed guardian as opposed to an attorney for property or care. These can include:
- Delay: Decision making may be effective immediately and will continue to be effective upon the incapacity of the grantor while a court appointed guardian needs to file an application for the role, and have their appointment granted by the court. This can cause a serious delay in dealing with property and financial matters.
- Cost: There are legal costs and other fees associated with applying to the court for guardianship. These could outweigh the cost of preparing a power of attorney while the grantor is unquestionably capable.
- Dispute: Where the intentions of the grantor are not given by power of attorney, there is risk of disagreement amongst family members over who should have financial control, which could lead to lengthy and costly contested guardianship applications.
- Wishes: The court may appoint a guardian who otherwise would not have been the incapable person’s first choice.
- Powers: An attorney’s powers are typically unrestricted, offering them breadth to do all things the grantor could do if capable. The powers of a court-appointed guardian, however, could be subject to limitations imposed by the court.
Estate Planning With Mann Lawyers in Ontario
Having powers of attorney in-place, regularly updated will give you control in deciding who will make decisions on your behalf should you lose the capacity to make decisions about your property and/or your personal care yourself. It also allows your substitute decision maker to act swiftly, without procedural complications.
If you would like assistance with incapacity planning and preparing powers of attorney, please do not hesitate to contact a member of our Wills and Estates team in Ottawa or Perth.
This blog post was written by Sara Jetten, a member of the Wills and Estates team, and Suzan Kadri, Summer Student. Sara can be reached at 343-451-7001 or at [email protected].
