What is a Power of Attorney?
A Power of Attorney is a legal document which names another person as a substitute decision-maker. It can describe the kinds of things that the decision-maker is allowed to do. It can be for an indefinite time, or end at a certain time or upon the happening of a certain event. It can also be limited to certain geographic areas, such as a province or country.
In Ontario, the law governs the creation and use of Powers of Attorney is called the Substitute Decisions Act.
A copy of the statute can be found here: www.ontario.ca/laws/statute/92s30
The person granting the Power of Attorney is called the donor. The person who is appointed as the substitute decision-maker is called the attorney. The term “attorney” simply means a person who can legally represent someone else. It doesn’t necessarily mean a lawyer.
A Power of Attorney can name more than one person at a time as attorney; it can specify whether or not they must make their decisions together, or individually; and it can provide for alternate choices.
Although, under Ontario law, no particular document or form is required, there are a couple of formalities which must be observed when the power of attorney is signed. For example, it requires witnessing by two people, neither of whom can be the attorney or the spouse or child of the attorney or of the donor. They must also sign certain statements that are set out in the Substitute Decisions Act.
In Ontario, there are two main kinds of Power of Attorney: a Power of Attorney for Property, and a Power of Attorney for Personal Care.
What is a Power of Attorney for Property?
A Power of Attorney for Property appoints a substitute decision-maker who can make decisions concerning anything that the donor can legally do themselves, except make a Will or sign another Power of Attorney, but it does not grant decision-making power for medical or health issues, or decisions about long-term care, such as housing or nutrition.
A Power of Attorney for Property can be for an indefinite period of time, or it can end after a specified date or event.
A Power of Attorney for Property can be confined to use only when the donor is not legally competent to make decisions, such as once a doctor has confirmed that he or she is no longer legally competent. It’s a good idea to make sure that the power of attorney specify what kind of proof is needed.
A Power of Attorney for Property can limit the attorney’s ability to make decisions regarding certain things. For example, it could grant decision-making power only concerning a particular bank account, dealing with a certain piece of real estate, or only dealing with shares in a corporation. The limitations need to be spelled out clearly in the power of attorney document.
Who should I name as my Power of Attorney for Property?
You should name someone who is familiar with your own affairs, and whom you trust to exercise the power only in your interests. You should be sure that the attorney possesses the necessary skills and experience for this. Most people appoint their spouse or adult child. If the power of attorney for property is intended to be used in connection with the operation of a business, then the attorney should be familiar with the business and have business experience.
What is a Power of Attorney for Personal Care?
A Power of Attorney for Personal Care appoints a substitute decision-maker who can only make decisions concerning the donor’s medical or health issues, or decisions about long-term care, such as housing or nutrition.
A Power of Attorney for Personal Care can only be used if the donor is found to be legally incompetent to make decisions concerning their own medical or long-term personal care. A person can be incompetent to make decisions concerning their personal affairs while still be considered competent to make personal care decisions. In other words, the competency threshold for making personal care decisions is lower than the threshold for making all other kinds of decisions.
Who should I name as my Power of Attorney Personal Care?
You should name someone who is familiar with you, your health and other medical needs, and who understands how you want to be looked after. The attorney is legally required to ensure that your wishes are followed as much as possible. Again, most people appoint their spouse or adult child.
Why do I need a Power of Attorney for Property?
You can choose who will be your substitute decision-maker, rather than leaving it to other people to decide who will become responsible for looking after you. If you have not appointed an attorney for property or for personal care, then nobody is automatically your substitute decision-maker if you become legally incompetent. By default, the government becomes your legal guardian. If that happens, then someone in your family would probably wish to apply to be appointed as your legal guardian. This is a time-consuming and possibly expensive process. The person who then becomes your legal guardian might not necessarily be the person that you would have wanted for this role.
Why would you want to force those around you to have to deal with crisis management, when it is so easy to arrange things in advance so they will not have to? It’s not very expensive to have done properly.
In Ontario, you can create your own power of attorney, but if you don’t do it correctly, you can cause a lot of problems, which might not be able to be fixed once you are no longer competent to sign a new power of attorney. I strongly recommend that you have a lawyer look after the preparation and signing of this very important and useful legal document.