Power of Attorney (POA)
Powers of Attorney (POA) are dictated by each province; in Ontario, a basic form is available from the Ontario Ministry of the Attorney general. Other provinces have access to power of attorney forms on their websites. A lawyer may also be consulted to prepare the form.
What is Power of Attorney?
The objective of a POA is to assign a designate – an ‘attorney’, (which in this case does not mean a lawyer) to understand and carry out your wishes in the event you (the 'donor') are incapacitated. Power of Attorney gives them the legal ability to act on the donor’s behalf in financial and legal matters. Family members do not have the automatic right to act on your behalf and the direction of an authorized POA will supersede those of a family member.
For example, you might grant legal Power of Attorney to your oldest daughter to act on your behalf. This is especially applicable for seniors who have been diagnosed with a progressive disease such as dementia. In this case, Power of Attorney allows your daughter to freely handle financial decisions in your stead, if the POA is durable (see below).
POA for Care
The POA for Care is ‘invoked’, or activated, only when the person is physically or mentally incapacitated. This in itself is a very grey area of the law. For example, a person may seem to be neglecting their health or personal care, living in squalor and hoarding, but be mentally capable of making personal and financial decisions, and therefore entitled to do as they wish. Mental capacity, usually defined as the ability to understand the implications of an action or a decision, is assessed by a variety of tests and evaluative instruments, given by a doctor or registered Capacity Assessor, supervised (in Ontario) by the Ontario Ministry of the Attorney General’s Office of the Public Guardian and Trustee.
The POA for Care may also include advanced directives or a ‘Living Will’, which are your specific wishes for extraordinary measures such as intubation or life support. A simple ‘do not resuscitate’, also known as ‘DNR’, only covers the unlikely event of a cardiac arrest; much more aggressive measures are typically taken in a modern emergency room. It is important to know that any type of life support is not withdrawn without extensive discussion with the POA for Care, other family members and the hospital ethics committee.
The POA for Property
The POA for Property is a similar but much more controversial document. Like the POA for Care, the POA for Property is used to direct a person’s business affairs such as banking, bill paying, investments, buying and selling of property, when they are physical or mentally incapacitated. Read more about the power of attorney for property.
POA for Property and Elder Abuse
A major difference from the POA for Care is a dangerous one – the POA for Property may be invoked as soon as it is executed, and may therefore be subject to fraud. There are increasing reports of financial elder abuse from adult children, financial managers or estate lawyers whose valid POA’s allowed them to transfer funds, cash in or redirect investments and sell property without the senior’s knowledge, with tragic results. Having a trusted lawyer discuss, understand and create a customized POA for Property may cost $300-$900 and be well worth the fee. For example you may want to add a clause prohibiting the selling or mortgaging of your property without the agreement of all of your children. If you have designated one of your children to be your POA for Property, you may designate that he or she must provide a monthly accounting to your other children.
General Power of Attorney vs. Durable Power of Attorney
General Power of Attorney might be assigned (for example) in the case of being out of the country. The donor still has the power to override any decision made by the person assigned the POA. If the Power of Attorney is stipulated as durable then it remains legally valid after you are incapicated.
What are the Limits of Power of Attorney?
Power of Attorney does not give the 'attorney' authority to override decisions made by the donor (who, in this case, may be suffering the effects of dementia). Power of Attorney becomes invalid if the donor is deceased. All legal affairs related to the estate of the deceased are handled by a legal will and its executor.
You will typically assign Power of Attorney to the person you trust the most and assume will be around after you are incapacitated. This is typically a family member but may also be a close friend, a domestic partner or anyone you trust to make responsible decisions for you in your stead. Then, should your disease progress so far that you are incapable of making clear decisions about financial matters (for example), these issues will be handled by the 'attorney.'
Additional Information and Sources
Attorney General of Canada offers legal instructions and definitions, along with two forms you can download: the Power of Attorney for Property, and the Power of Attorney for Personal Care.