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What’s a Power of Attorney for Property and why do I need one?

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What’s a Power of Attorney for Property and why do I need one?
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What’s a Power of Attorney for Property and why do I need one?
Reviewed: 
April 23, 2020
Answer

Because of COVID-19, you might be thinking of making a Power of Attorney. A Power of Attorney is a legal document that lets you name someone to make decisions for you. This person is called your attorney.

There are 2 main kinds of Power of Attorney that you can make:

You can make a Power of Attorney for Property if you’re 18 years old and mentally capable. Mentally capable means:

  • You know what property you have and about how much it’s worth.
  • You know if someone depends on you financially and what you need to do for them.
  • You know that as long as you’re mentally capable you can revoke or cancel your Power of Attorney.
  • You understand what you’re giving your attorney the power to do.
  • You understand that if your attorney does not do their job well or is dishonest, you could lose money.

You must also be making your Power of Attorney without anyone forcing you to.

Power of Attorney for Property

A Power of Attorney for Property lets your attorney deal with your property on your behalf. This can include doing things like your banking, signing cheques, paying bills, buying or selling real estate, and buying consumer goods and services, such as furniture and appliances.

Your attorney can’t:

  • make or change your will
  • make or change a beneficiary who is on your insurance policy or a registered plan, such as your registered retirement savings plan (RRSP)
  • make a new power of attorney for you

When your attorney can start acting for you

A Power of Attorney for Property can start working as soon as you sign it. This means your attorney can start managing your property even while you’re mentally capable.

You can limit how long the Power of Attorney lasts. For example, you can make a Power of Attorney that lasts only for the time you’re ill or away on vacation.

And you can limit what your attorney can do. For example, you can make a Power of Attorney that lets your attorney only sign documents that are needed to sell your home.

If you want your Power of Attorney for Property to come into effect only when you’re mentally incapable, you must include a statement saying this. It’s a good idea for the statement to also say who you want to decide about your capacity. This person does not have to be a health-care practitioner or a formal Capacity Assessor. It can also be your attorney, a friend, or someone else who you trust to assess you in a fair way. Otherwise your attorney will have to pay a formal Capacity Assessor to do the assessment.

Any Power of Attorney that can be used by an attorney after you are incapable of managing property is called a Continuing Power of Attorney for Property.

Choosing an attorney

Your attorney should be someone you trust to manage your property in the same way you would. Ask yourself: Can you trust them? Are they good at handling money?

You can talk to your attorney about the kinds of decisions they might have to make for you.

You can appoint more than one person to be your attorney. If you do this, you must decide if they have to act jointly and agree on every decision. Or, you may decide that they can act jointly and separately, which means they can each act on their own or together.

You can also appoint substitute attorneys in case an attorney can’t or does not want to act when they need to.

People usually appoint family members or close friends to be their attorney. If you don’t have family or close friends in Canada, you might ask a member of your local community to be your attorney. This could be a co-worker, somebody you regularly do business with, or a religious advisor, such as a minster, rabbi, or imam.  

It’s usually best to appoint an attorney who lives in Canada. And it’s better if they live in Ontario. An attorney needs to be able to respond quickly to urgent matters, monitor how you’re doing, and make sure your needs are met.

If you don’t have a Power of Attorney

If you don’t have a Power of Attorney for Property and become incapable of managing your property then one of 3 things may happen:

  • You may be able to make a Power of Attorney for Property if you’re capable of making one but not capable of managing your property. Get legal help if you want to do this.
  • Someone could go to court and ask to be appointed to manage your property as your Guardian of Property.
  • Someone could arrange to have you assessed by a formal Capacity Assessor. If the assessor finds that you’re not capable of managing your property, they tell the Office of the Public Guardian and Trustee (PGT). The PGT then becomes your Statutory Guardian and has the power to make all property decisions for you. Your family, friends, or someone else can then apply to take over those powers from the PGT.  

Making a Power of Attorney

There are 3 ways to make a Power of Attorney for Property:

  1. Use CLEO’s Power of Attorney Guided Pathway. This is a free online interview that helps you create a Power of Attorney for Personal Care and a Continuing Power of Attorney for Property. You can also use the Pathway to cancel any previous Powers of Attorney you made.
  2. Use a Power of Attorney kit. You can get a free one from the Ministry of the Attorney General website. There are others you can buy online or at stores. But be sure the kit is based on the law in Ontario.
  3. Ask a lawyer to prepare your Power of Attorney. This will cost more but the lawyer will make sure that it follows the law.

You must sign your Power of Attorney for Property in front of 2 witnesses. The witnesses must both be with you when you sign and when they sign. The witnesses can be anyone except:

  • your spouse, partner, child, or someone you treat as your child, such as a stepchild you support
  • your attorney or your attorney's spouse or partner
  • someone under the age of 18

Virtual witnessing

Because of COVID-19, it can be difficult to have witnesses physically present when you sign your Power of Attorney.

The government made an emergency order on April 7, 2020 and April 22, 2020, that lets witnesses be “present” virtually.

For this to apply:

  • You must use audio-visual technology that lets you and your 2 witnesses see, hear, and speak to each other at the same time.
  • One of the witnesses must be a lawyer or paralegal licensed by the Law Society of Ontario.
  • Everyone signs an identical copy of the Power of Attorney at the same time.
  • The audio-video session can be recorded.

The Power of Attorney is made up of all these copies.

The law firm Hull & Hull created a checklist to help you make sure you’re following the rules about using audio-visual technology. Thanks to Hull & Hull for letting us link to this. 

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