Originally authorized under the Powers of Attorney Act, R.S.O. 1990, c. P.20, a power of attorney is a legally binding document in which one person (the principal or grantor) appoints another person or persons (the attorney or substitute decision maker) to act on their behalf in the event they are unable to make their own decisions.
The Powers of Attorney Act only provided a mechanism for appointing substitute decisions makers with respect to property and has been substantially repealed. It was not until the enactment of the Substitute Decisions Act, 1992, S.O. 1992, c. 30 (“SDA”), which came into force on April 3rd, 1995, that it became possible to also name substitute decisions makers with respect to personal care decisions.
The SDA preserves certain powers of attorney created under the old legislation. They must have been executed before April 3rd, 1995 or within six months after that date. They must also: contain a provision expressly stating that it may be exercised during any subsequent legal incapacity of the grantor; have been executed in accordance with the Powers of Attorney Act; and otherwise be valid.
Powers of Attorney for property, unless restricted as to their use, allow the attorney to do on behalf of the grantor anything the grantor could do except make a will or other form of testamentary disposition. For example, property decisions would include such financial issues as: bank deposits and withdrawals, paying bills, making or changing investments, buying, selling or refinancing a home, making payments to or on behalf of dependants, and filing income tax returns.
Personal care is defined in the SDA and includes decisions about health care, shelter, clothing, nutrition, hygiene, and safety.
In Ontario, there are currently three different types of power of attorney: two for property and one for personal care. These include: a general power of attorney for property, a continuing power of attorney for property, and a power of attorney for personal care.
A General Power of Attorney for Property is ordinarily used if a person wants to appoint someone to act on their behalf for a specific period of time or for a specific task. This type of power of attorney ends upon completion of the time or the specific task, or if the grantor becomes mentally incapable.
A Continuing Power of Attorney for Property is used where a person wishes to appoint someone to act on their behalf while they are mentally capable as well as to act on their behalf in the event of mentally incapacity. These powers of attorney can be for a specified period or task or they can be all encompassing. Both types of powers of attorney for property can be effective on the date of signing or on the happening of a specified condition other than incapacity which can only be a condition for continuing powers of attorney for property.
A Power of Attorney for Personal Care enables the grantor to appoint an Attorney for Personal Care to make personal care decisions in the event the grantor becomes incapable of making their own personal care decisions. Incapacity can be either mental or physical depending on the circumstances. For persons who have specific wishes regarding their personal care, these can be included in the power of attorney for personal care document. These wishes can also be specified in a separate advance directive, usually prepared in consultation with a doctor or other health care provider, and incorporated by reference into the power of attorney for personal care.
Power of attorney documents confer significant authority on the substitute decision maker. Caution should be exercised in selecting these persons, especially with respect to unrestricted continuing powers of attorney for property that are effective on signing.
The requirements for a valid power of attorney under the SDA are:
- The donor must be at least 18 for powers of attorney for property, and at least 16 for powers of attorney for personal care.
- The donor must be capable of granting a power of attorney. Each type of power of attorney. Each type of power of attorney has its own guidelines for assessing capacity with powers of attorney for property having the higher standard.
For powers of attorney for property a person is capable if he or she:
- knows what kind of property he or she has and its approximate value;
- is aware of obligations owed to his or her dependants;
- 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;
- knows that the attorney must account for his or her dealings with the person’s property;
- knows that he or she may, if capable, revoke the continuing power of attorney;
- appreciates that unless the attorney manages the property prudently its value may decline; and
- appreciates the possibility that the attorney could misuse the authority given to him or her.
For powers of attorney for personal care a person is capable if he or she:
- has the ability to understand whether the proposed attorney has a genuine concern for the person’s welfare; and
- appreciates that he or she (the donor) may need to have the proposed attorney (the donee) make decisions for him or her.
- Both powers of attorney for property and personal care must be executed in the presence of two witnesses. A witness cannot be the attorney or the attorney’s spouse or partner, a the grantor’s spouse or partner, a child of the grantor or a person whom the grantor has demonstrated a settled intention to treat as his or her child, a person whose property is under guardianship or who has a guardian of the person, and a person who is less than eighteen years old.
Powers of attorney for property and personal care can both be revoked by the donor if they have the capacity to do so.