Powers of Attorney 101
Generally speaking, Powers of Attorney (POAs) are legal documents that let you appoint someone else to make decisions regarding your health and/or finances, should you become mentally incapable of doing so yourself.
These important documents fit in the category of “incapacity planning”, meaning planning for a point in time when you are alive, but incapable of making decisions for yourself. In most provinces, there are two types of incapacity planning documents that are typically prepared alongside a Will as part of a comprehensive estate plan—one to cover financial decisions and one to cover health care decisions.
A Power of Attorney is different than a Will (and you should have both)
The main difference is that a Will deals with what happens once you’re no longer alive and Powers of Attorney are for situations where you’re alive but not mentally capable of making decisions for yourself. Incapacity could be the result of an accident, an illness, or as a result of a gradual, age-related decrease in your mental abilities.
You might wonder whether you still need Powers of Attorney if you already have a Will. The answer is yes. Each document helps you prepare for the future, but each one deals with different things and at different times. It’s a very good idea to have both a Power of Attorney and a Will.
What are the different types of Powers of Attorney?
In Ontario, there are two main types of POAs: A Power of Attorney for Property (POA-P) and a Power of Attorney for Personal Care (POA-PC).
Power of Attorney for Property
This Power of Attorney lets you appoint someone (called your “attorney for property”) to make financial decisions for you and act on your behalf on all your financial affairs if you’re incapable of doing these things for yourself.
A POA-P is called different things depending on where you live:
In Ontario, it’s called a Power of Attorney for Property.
In British Columbia, Alberta, Manitoba, New Brunswick, the Northwest Territories, Nova Scotia, Newfoundland & Labrador, and Saskatchewan, it’s called an Enduring Power of Attorney.
Power of Attorney for Personal Care
This Power of Attorney lets you appoint an “attorney for personal care” who will make decisions about your health care and end-of-life care if you’re incapable of doing so yourself.
Just to keep things interesting, a POA-PC also has different names depending on your province or territory:
In Ontario and New Brunswick, it’s called a Power of Attorney for Personal Care.
In British Columbia, it’s called a Representation Agreement.
In Alberta, Nova Scotia, and Nunavut, it’s a Personal Directive.
In Manitoba and Saskatchewan it’s called a Health Care Directive.
In Newfoundland & Labrador, it’s called an Advance Health Care Directive.
Types of things authorized with a Power of Attorney for Property?
It is up to you how much power you wish for your attorney to have. It’s pretty common though to grant your authority broad power to allow them to quickly step directly into your shoes and be in a position to manage your affairs. This often requires having full control over your finances, during the time when you are mentally incapable of making financial decisions yourself.
One thing your attorney will not be able to do is change a Will or write a new one.
During any period of incapacity, your attorney for property gets:
Access to your bank accounts and investments.
The ability to manage your funds and use them to pay your expenses, like your rent and utility bills.
The responsibility to file your annual income taxes.
The authority to sell real estate on your behalf if you need to move (e.g. to an assisted-care facility.)
Yes, your attorney for property can get a lot of control over important things in your life. But they also have a legal obligation to manage your assets in your best interests. They’re required by law to manage your funds to your (and your dependents’) benefit.
Some people are shocked to learn that no other person or family member, not even your spouse, has the automatic right to step in and manage your legal and financial affairs. This is why having a Power of Attorney for Property in place is the only legal way to make sure you choose the person who makes important decisions about your health and finances. Without this important legal document, the court may have to appoint someone to make decisions for you, and this may not be the person you’d want for the job.
Types of things authorized under a Power of Attorney for Personal Care
A POA-PC lets you appoint an “attorney for personal care” who will make decisions about your healthcare and end-of-life care if you’re mentally incapable of doing so yourself.
These decisions can relate to your:
Healthcare
Nutrition
Shelter
Clothing
Hygiene
Safety
Some examples of decisions your attorney for personal care might have to make include: whether you should remain in your home or be moved to an assisted-care facility, when you need to visit a doctor, and decisions about your end-of-life care.
If you have wishes for the way you want to live your life in the event you are in a situation when you can’t make decisions for yourself, you should write them down and share them with the person appointed in your POA-PC.
In the event that you do not have a POA-PC and you become mentally incapable of making personal care decisions, the law in Ontario allows other substitute decision-makers to make some of these important decisions. These other substitute decision-makers are usually family members.
Who should I appoint as my attorney?
Whoever you choose as your attorney will be making some (and potentially very many) really important decisions. You should know that despite what the name suggests, they don’t have to be actual attorneys (lawyers.) It is important that you have a lot of trust in the person (or people) you appoint as your attorneys for property and personal care.
Here are some other things to consider when choosing the right person to be your attorney for property and personal care.
Choosing an attorney for property
Your attorney for property must be over the age of majority in your province and must be mentally competent.
Since this person will be making important decisions regarding your finances, in addition to being trustworthy, this should be someone that you believe is ready and willing to take on the responsibility should the need arise.
Also, because this person will be dealing with your financial matters, it would be ideal if they are comfortable with these sorts of things. They will be required to keep detailed records of their decisions.
Choosing an attorney for personal care
In Ontario, someone who is at least 16 years old can be your attorney for personal care. Your attorney also has to be mentally competent. Your attorney for personal care makes very personal decisions for you about your housing, wellbeing, and health care. You should appoint someone you trust to follow your wishes, and someone mature enough to handle very tough and emotional decisions.
There are some additional limits on who can be appointed as your attorney for personal care.
Unless this person is a family member, your attorney for personal care can’t be someone you pay to provide certain services, including:
Housing services (like your landlord)
Health care services (like a doctor, nurse, therapist, or attendant)
Social or support services (like your social worker or counselor)
Education (like your teacher)
Who can witness my Power of Attorney for Property?
Just like a Will, a Power of Attorney for Property must be printed, signed, and witnessed in order to be legally valid.
Witnessing a POA-P in Ontario
In order for your Power of Attorney for Property to be legally valid in Ontario, it must be signed in the presence of two witnesses, just like your Will. Both you and your two witnesses must sign the POA. It is common practice to also have everyone (you and your witnesses) initial each page.
Your witnesses must meet a few criteria:
Must be an adult (over the age of majority in your province.)
Must be mentally capable
They cannot be:
Your spouse or partner
Your child
Your attorney or their spouse or partner
Someone who is incapacitated
Who can witness my Power of Attorney for Personal Care?
A Power of Attorney for Personal Care must also be printed, signed, and witnessed in order to be considered a legally valid document.
This Power of Attorney must also be signed in the presence of two witnesses. These witnesses can be the same as the people who signed and witnessed your Will and POA-P.
In addition to signing and dating the document, it is common to initial each page and have your witnesses do the same.
Your witnesses must meet the following criteria (and if the list looks familiar, it’s because it’s the same one you just saw above).
They must be:
Legal age of majority in your province
Mentally capable
They cannot be:
Your spouse or partner
Your child
Your attorney or your attorney’s spouse or partner
Someone whose property is under guardianship or who has a guardian of the person
How can I change or end my Power of Attorney?
There are a few different situations when a Power of Attorney can end. Some POAs are meant to end at a designated time or once a specific task is complete.
In other circumstances, you could choose to end it or an event can end it.
Limited Power of Attorney for Property
A “Limited” or “Specific” POA-P is precisely as it sounds—it only exists for a specific amount of time. You can use a Limited Power of Attorney for Property to assign someone to accomplish a specific task, like buying or selling real estate. This type of POA ends as soon as the task is complete or on the date specified in the document.
This is not the type of Power of Attorney that is commonly created as part of your estate planning.
Ending a Power of Attorney for Property
A Power of Attorney for Property is the type of Power of Attorney that is commonly created as part of your estate planning.
A Continuing Power of Attorney is the name given to a Power of Attorney that “survives incapacity”, meaning that when you become incapacitated it still operates. There are several ways for one of these Powers of Attorney to end.
If you cancel it, while still capable
If your attorney dies (and you haven’t named an alternate or multiple attorneys.)
If you die.
Canceling your POA
As life changes, relationships and life circumstances can change as well. This means there may come a time when you wish to cancel your POA and/or assign another person as your attorney for property or personal care.
You can choose to revoke your POA at any time, as long as you are mentally capable at the time. All you need to do in order to cancel or revoke a POA is state it in writing (called a ‘notice of revocation’) and have it signed and witnessed the same as you did with your POA.
Make sure to send a copy of the revocation notice to anyone who should know about the revocation, including:
Organizations or companies your attorney deals with
Banks and pension sources
A lawyer who can register the notice on title to avoid unauthorized dealing of any owned property
Keep a copy of the notice of revocation for your own records. It will take effect as soon as it’s given to everyone listed above or on a date specified in the notice. We recommend you destroy the previous POA as well.
