Power of Attorney for Property and Finances
What is a power of attorney for property; what is an attorney?
It authorizes someone to deal with your property for you - your assets and finances. The person you name is your “attorney”. You can name one attorney or more than one. You can require that they act together (“jointly”) or you can have them act separately as well as together (“jointly and severally”). You can name someone to replace, or substitute for, an attorney who cannot act, or continue to act, for you - a “substitute” attorney.
What is a general power of attorney; what is a limited power of attorney?
A “general"power of attorney is one where you authorize your attorney to do anything that you can do. But your attorney can’t make your Will, or replace you in some fiduciary capacity (for instance, as a director of a company, as an attorney under someone else’s power of attorney, as an executor of a will or a trustee of a trust).
A “limited"power of attorney is one where you give the power of attorney for some specific purpose, such as, for instance, to sign cheques for you on your bank account, or to sell some real estate for you.
What is a “continuing power of attorney”?
It is one that continues if you become incapable of managing your property. It is one that says that it is a “continuing power of attorney”, or it says that it can be used during your incapacity. If it doesn’t say that, it is not a continuing power of attorney and it cannot be used during your incapacity and it ends if you become incapable.
Things to consider in making a power of attorney
Who do you want to manage your finances? What instructions will you give them? Will it be limited or general? Do you want more than one attorney, and if you want more than one, are they to act jointly or jointly and severally? If your attorney can’t act or continue to act, do you want to name a substitute?
Do you want the power of attorney to be effective when you sign the power of attorney, or do you want to delay its effect until you become incapable? If so who is to decide if you become incapable? (See “When will my power of attorney take effect?”)
Can I revoke a continuing power of attorney?
Yes, if you have not become incapable of doing so.
Can I make a power of attorney after I become incapable?
No, you can’t.
What does “capable of giving a continuing power of attorney” mean?
It means that you know what kind of assets you have and their approximate values; that your attorney can do for you anything that you can do if it is a general power or the particular action if it is a limited power; that your attorney must account for what he or she does for you; that you can revoke the power of attorney while you are capable of doing so; that your asset values may decline if your attorney does not act prudently and that an attorney may misuse his or her authority.
What are my attorney’s responsibilities?
To act in your best interests.
- If you also give someone a power of attorney for personal care, act consistently with that person’s decisions (if those decisions don’t impair your finances).
- Consult with you, and with your supportive family members and friends of you who are in regular personal contact with you.
- Use what you have, first, for your support and care; then if assets are available, for the support of your dependants; then if assets are available, for your other obligations.
- If there is something left over, your attorney can make gifts or loans to relatives, and gifts to charity based on your previous practice and intentions (you can refer to this in your power of attorney). Gifts to charity cannot be more than 20% of your income unless your power of attorney says otherwise (and you can restrict it to less than 20%).
- Obtain a copy of your will and information about your assets and liabilities (others who have this information have to provide it to your attorney).
- If, in your Will, you give a particular asset, for example a personal item or a particular property, to someone, your attorney should not dispose of that item to raise the funds to look after you, unless it is necessary to do so; and in that case the person to whom you give the item in your Will is to receive equivalent value from your estate.
- Keep accounts, and give an accounting when called on to do so: this includes lists of your assets as of the date of your attorney’s first transaction; of assets acquired and disposed of and the date and particulars of each transaction; of all money receipts and disbursements and the date and particulars of each transaction; of all investments bought and sold and the date and particulars of each transaction; of all your liabilities as of the date of the attorney’s first transaction; of liabilities incurred and paid and the date and particulars of each transaction; of all compensation taken by the attorney and how it is calculated.
- Keep a copy of the continuing power of attorney and of any court orders relating to the attorney’s authority.
- Not disclose any information in the accounts except to you and to your attorney for personal care, if requested by you or such attorney.
- Keep these records until she or he ceases acting for you and until the attorney receives a release from someone authorized to give it, or until another person acquires authority to manage your property and your attorney gives the records to that person, or if you die, until the attorney gives the records to your executor, or until there is a court order.
When will my power of attorney take effect?
It takes effect when you sign it, unless it says that it takes effect later. For instance, you can say that it will take effect if you become incapable, and you can say how that incapacity is determined, or who can determine it. If it says that it takes effect on your incapacity and it doesn’t say how that is determined or who determines it, the power of attorney takes effect when you are assessed or certified as incapable (see “Certification”).
When will my power of attorney end?
It will end when you die, if you revoke it, if the attorney dies (unless you name more than one, or if you name a substitute), or the court appoints a guardian of your property.
A later power of attorney revokes an earlier one, unless the new one says that there are to be multiple powers of attorney. So if you are doing a power of attorney and you don’t want to revoke an earlier one, you need to include the “multiple powers” phrase in the later one.
How much will my attorney be paid?
In your power of attorney, you can state how much your attorney will be paid. If you don’t, if the attorney wants to be paid, the fees will be prescribed by regulation. As of April 2000, the regulated fees are 3% on capital and income receipts and on capital and income disbursements, and 3/5ths of 1% on the annual average value of the assets for management.
How do I sign my power of attorney?
You must sign it in the presence of two witnesses. The witnesses must be at least 18, and neither can be the attorney or the spouse of the attorney, or your spouse or child, or your partner.
How does an attorney resign?
Your attorney can resign, but if she or he has taken any action for you under the power of attorney, the resignation does not take effect until she or he delivers a copy of the resignation to you, to any other attorneys named in the power of attorney and to the person named as a substitute for the attorney who is resigning.
When the attorney is resigning, if she or he believes that you are incapable, and if you have not named a substitute for the attorney who is resigning, the attorney must also deliver the resignation to your spouse (or partner), and to your relatives (known to the attorney) who live in Ontario. The resigning attorney also notifies persons with whom the attorney is dealing on your behalf.
What happens if I don’t have a power of attorney and I become incapable?
Someone can apply to the court to be appointed the statutory guardian of your property - your assets and finances.
If you become a patient of a psychiatric facility, you could be certified as incapable, and if so, the Public Guardian and Trustee (an office of the Ontario government) becomes the statutory guardian of your property.
You could also be certified and the Public Guardian and Trustee would become your statutory guardian, if someone asks that you be assessed and if the Assessor certifies that you are incapable. The person requesting the assessment must first enquire and be unaware of a power of attorney, and of any family member who intends applying to be appointed your guardian.
If you have given a power of attorney for property before a certificate is issued, the Public Guardian and Trustee is not appointed.
If you do not give a power of attorney and if you are certified incapable, a family member can be appointed your guardian.