POAP Archives - Canada

My parents have dementia – how can I help them?

Posted on January 13, 2020March 22, 2023 By admin

If a parent becomes or may become mentally incapable of managing their own affairs, there are a few options to consider. The following information may be helpful if your parent(s) have been diagnosed with dementia or are experiencing the early onset of this disease. Please note that this article gives general information for provinces other than Québec. For information regarding Québec, please see the article “Incapacity Planning in Québec”.

Appointing a Power of Attorney for Property (POAP)

The role of someone appointed under a POAP is to step into the shoes of an incapable individual for the purpose of making financial decisions that they can no longer make for themselves. The purpose of a POA is to protect the interests and welfare of the individual who appointed the attorney.

An individual who has been appointed under a POAP can manage the grantor’s financial affairs and make legal decisions with respect to physical assets. Unless the grantor restricts these powers, the attorney will be able to do almost anything that the grantor can do concerning finances. They can sign documents, start or defend a lawsuit, sell property, make investments and purchase things for the grantor. However, under a POAP, an individual cannot make or change an existing Will, change beneficiaries on a specific insurance product or transfer their duties under the POAP to someone else.

Appointing a Power of Attorney for Personal Care (POAPC)

A POAPC is a legal document that gives an individual (the attorney) the power to act on someone else’s behalf by making personal care decisions. If an attorney has been appointed, they will be legally capable of dealing with the affairs of someone who is incapable of making their own such decisions. Unless the attorney’s powers are restricted, they will be able to make almost any decision pertaining to the incapacitated individual’s personal life, including choices as to medical treatment, housing, food, and other care. The PAPC will come into effect only when an individual is deemed mentally incapable of making their own personal care decisions.

It is possible that an incapacitated parent has already created a POAPC without the knowledge of one or more of their children. Inquiries should be made to legal advisors to determine whether a POAPC has been signed. If there is no pre-existing Power of Attorney, it may still be possible for a parent who is experiencing the early onset of dementia to execute one, so long as there is still sufficient mental capacity to do so.

If an individual becomes incapable of making personal care decisions, and they have not appointed an attorney for personal care, a family member will automatically have the right to make decisions on the individual’s behalf, unless someone else is appointed. A Court may appoint a guardian to make decisions on behalf of an incapable person for some or all aspects of personal care.

Become a guardian

If a parent becomes or may become mentally incapable of managing their own affairs, there are a few options to consider. The following information may be helpful if your parent(s) have been diagnosed with dementia or are experiencing the early onset of this disease. Please note that this article gives general information for provinces other than Québec. For information regarding incapacity planning in Québec, please see the article “Incapacity Planning in Québec”.

Appointing a Power of Attorney for Property (POA)

The role of someone appointed under a POA is to step into the shoes of an incapable individual for the purpose of making financial decisions that they can no longer make for themselves. The purpose of a POA is to protect the interests and welfare of the individual who appointed the attorney.

An individual who has been appointed under a POA can manage the grantor’s financial affairs and make legal decisions with respect to physical assets. Unless the grantor restricts these powers, the attorney will be able to do almost anything that the grantor can do concerning finances. They can sign documents, start or defend a lawsuit, sell property, make investments and purchase things for the grantor. However, under a POA, an individual cannot make or change an existing Will, change beneficiaries on a specific insurance product or transfer their duties under the POA to someone else.

Appointing a Power of Attorney for Personal Care (PAPC)

A PAPC is a legal document that gives an individual (the attorney) the power to act on someone else’s behalf by making personal care decisions. If an attorney has been appointed, they will be legally capable of dealing with the affairs of someone who is incapable of making their own such decisions. Unless the attorney’s powers are restricted, they will be able to make almost any decision pertaining to the incapacitated individual’s personal life, including choices as to medical treatment, housing, food, and other care. The PAPC will come into effect only when an individual is deemed mentally incapable of making their own personal care decisions.

It is possible that an incapacitated parent has already created a PAPC without the knowledge of one or more of their children. Inquiries should be made to legal advisors to determine whether a PAPC has been signed. If there is no pre-existing Power of Attorney, it may still be possible for a parent who is experiencing the early onset of dementia to execute one, so long as there is still sufficient mental capacity to do so.

Become a Guardian

A ‘Guardian of Property’ (also known as a “Trustee” in some provinces) is a person who is appointed to manage the financial affairs of an individual who is mentally incapable of doing so themselves. A Guardian may be appointed one of two ways:

(1) By a provincial Public Guardian and Trustee, or

(2) By a Court.

A Guardian of Property can do almost anything the incapable person could do in relation to their property. This may include collecting and depositing income, paying bills, making purchases and looking after legal matters. However, a Guardian of Property cannot make or change a Will.

A ‘Guardian of the Person’ (also known as a “Committee” in some provinces) is an individual authorized by the courts to make personal decisions for someone who is mentally incapable of doing so themselves. Generally, a Court will not appoint a Guardian of the Person if someone has been appointed under a Power of Attorney for Personal Care.

For legal advice with respect to becoming a Guardian of Property or a Guardian of the Person, please contact a TEP.

Other Options

Another option to consider under certain circumstances is a limited ‘trusteeship’. The administrators of some government benefits such as Canadian Pension Plan or Old Age Security can appoint a “trustee” to manage income on behalf of a recipient who has been deemed mentally incapable. This option is not appropriate for a recipient who also receives income from other sources, or has assets or legal matters that require management.

For further information and help planning for family members with dementia please consult a TEP.

Power of Attorney for Property

Posted on January 13, 2020March 22, 2023 By Joanna Pegum

A Power of Attorney for property (POAP) is a legal document that allows an individual (called the “grantor”) to appoint someone (called the “attorney”) to act on their behalf to make decisions about legal and financial affairs.

This article provides an overview of the law in provinces and territories other than Quebec (for information regarding incapacity planning in Québec, please see the article “Incapacity Planning in Québec”). Since each province and territory has separate legislation governing the creation of a POAP, appropriate legal advice should be sought in the relevant province.

Types of Powers of Attorney for Property

A POAP may be a general POAP, which allows the attorney to deal with all decisions regarding finances and property, or it may be a limited POAP, which allows the attorney to make decisions for a specific purpose or time (for example, to complete a particular transaction).

An ‘enduring’ or ‘continuing’ POAP remains in effect once the donor loses capacity. If the POAP is not specifically designated as enduring or continuing, it ceases to be effective when the donor loses capacity to manage property.

Normally, a POAP takes effect when it is signed. A ‘springing’ POAP only takes effect after a certain event or trigger (such as if the donor becoming incapable of making decisions).

Who can I name as my attorney?

When choosing an attorney, consider whether the person named is someone who can be trusted with handling money. They should be able to understand the affairs of the grantor, and be able to pick up managing them at whatever stage. An attorney must be 18 years of age or older. Some provinces have additional requirements, such as conditions that the attorney cannot be mentally incompetent, or bankrupt.

More than one person can be named as an attorney under a POAP. If multiple attorneys are named, the POAP should be clear as to whether attorneys must act together (jointly) or may act independently (jointly and severally). If there are more than two named attorneys, a POAP should be clear as to whether a majority of them may act.

While it is generally possible to appoint an attorney from another jurisdiction from a legal perspective, many practical and other issues may arise. For example, residents of the USA may not be permitted to give trading instructions on the investment account of a Canadian resident in certain situations. It is important to consult with a TEP prior to designating an attorney or attorney(s) to ensure that they are appropriate for this role.

Creating an Enduring or Continuing Power of Attorney for Property

Anyone who is 18 years of age or older and who has the necessary level of mental capacity can create an enduring or continuing POAP. Mental capacity, in this situation, requires that a grantor:

Knows what property they have and its approximate value;

– Is aware of their obligations to people (if any) who depend on them financially;

– Understands what they are giving an attorney the authority to do;

– Understands that the attorney is required to account for the decisions they make about the grantor’s property;

– Understands that, as long as they have mental capacity, they can revoke (cancel) the POAP;

– Understands that if the attorney does not manage the grantor’s financial assets properly, their value may decrease; and

Understands that there is always a chance of the attorney misusing their authority.

To create a valid enduring or continuing POAP, the document must:

– Be called an ‘Enduring’ or ‘Continuing’ Power of Attorney for Property (as appropriate) or say explicitly that it allows an attorney to continue acting if the grantor becomes mentally incapable;

– Name one or more persons to act as an attorney for property;

– Be signed and dated by the grantor; and

– Be signed by two valid witnesses who witness the document (in some provinces, it may be possible to have only one witness where that witness is a lawyer or notary public).

In certain jurisdictions, additional witnessing requirements may be in effect. For example, in British Columbia it is generally required that the attorneys execute certain documents acknowledging that they are aware of the POAP and consent to act.

Once the POAP is executed, it should be stored in a safe place where the attorney can access it quickly if needed. A POAP can also be stored with a trusted third party (such as the drafting lawyer), with specific instructions regarding when to release it.

When does a POAP take effect?

An enduring or continuing POAP takes effect immediately upon being signed and witnessed, unless the document states otherwise (i.e., unless it is a springing POAP). If the POAP is to take effect only after the grantor has become mentally incapable of managing their finances, the document must be clear about that limitation.

When does my Enduring or Continuing POAP end?

An enduring or continuing POAP ends when:

– The named attorney(s) die or become mentally incapable;

– A Court appoints a Guardian of the Property for the grantor;

– The grantor signs a new POAP while still mentally capable (this is not the automatic result of signing a new POAP in all provinces. Accordingly, the new POAP should be clear with respect to whether or not it is intended to revoke existing POAPs);

– The POAP is revoked while the grantor is still mentally capable; or

– The grantor dies (on the death of the grantor, attorneys will no longer be able to deal with bank accounts or other assets).

Will my POAP be recognized abroad?

A Canadian POAP may be valid in foreign jurisdictions, although third parties in other countries will likely require a court order to validate the POAP. To avoid any delay or minimize any concerns associated with the validity of a Canadian POAP while abroad, individuals are generally encouraged to execute Powers of Attorney in each foreign jurisdiction where property or money is situated.

In the event that arrangements have not been made to create a Power of Attorney in the foreign jurisdiction, a Canadian POAP may be acceptable. Some jurisdictions have specific wording and signing requirements for foreign POAPs to be valid. Anyone affected by this situation should seek advice from legal professionals in those jurisdictions. A TEP can direct inquiries to trusted advisors in their international TEP network.

What if I don’t have an Enduring or Continuing POAP?

A guardian (or trustee) may be appointed by the Court for individuals who become mentally incapable of managing property without a valid enduring or continuing POAP. A family member or friend may apply to a Court to be given permission to manage the individual’s assets. If family or friends do not want to be burdened with this role, they may ask a trust company to apply to the Court to be a statutory guardian. If no one else has been appointed, the Public Guardian and Trustee of the jurisdiction of residence may take on this role.

For further information or help preparing a POAP, please consult a TEP.

I have been given Power of Attorney. What does that mean?

Posted on January 10, 2020March 22, 2023 By admin

Outside of Québec, the role of someone appointed under a Power of Attorney (POA) is to step into the shoes of an incapable individual for the purpose of making financial decisions and/or personal care decisions that they can no longer make for themselves. The purpose of a POA is to protect the interests and welfare of the individual who appointed the attorney.

For information regarding incapacity planning in Québec, please see the article Incapacity Planning in Québec.

The duties of the attorney are outlined in the POA legal documents. Generally, the attorney will be able to do everything that the grantor can do with respect to their personal matters, unless they are explicitly restricted from doing so.

The nature of the role will depend on the type of POA which has been executed. Generally, there are two main types of POA appointments:

Power of Attorney for Property (POAP)

Power of Attorney for Personal Care (POAPC) (also known in some jurisdictions as a personal care directive)

Appointed as Power of Attorney for Property (POAP)

An individual will be able to assume responsibilities under a POAP as soon as it is signed and witnessed, unless the document says otherwise. An attorney is required to keep the grantor’s financial information confidential and should respect the grantor’s privacy unless: (1) the grantor specifically authorizes them to disclose information by saying so in the POAP; or (2) they need to disclose this information to carry out their duties or to abide by the law.

When carrying out their obligations under a POAP, an attorney is generally entitled to take payment from the grantor’s funds at a rate specified by law, which varies by province, unless the grantor states otherwise in the document. An attorney is also required to provide the grantor with a full accounting whenever asked.

Appointed as Power of Attorney for Personal Care (POAPC)

An individual appointed under a POAPC is responsible for managing the personal care and health care decisions of the grantor. With regard to personal care, they may make decisions pertaining to housing, diet, personal hygiene and social life. With respect to health care, they may make decisions regarding medical treatment or the withholding of such treatment. Under a POAPC, the attorney can only make decisions about those aspects of personal care that the grantor cannot make themselves.

Unlike a POAP, a POAPC may only be used during a time that the grantor is mentally incapable of making their own personal care decisions. The attorney is typically responsible for deciding whether the grantor is mentally incapable, with a few exceptions (such as if specified otherwise in the PAPC).

An attorney appointed under a POAPC is also required to keep the grantor’s personal information confidential. As with a POAP, the grantor’s privacy should be respected unless: (1) the grantor specifically authorizes them to disclose information by saying so in the POAPC; or (2) they need to disclose this information to carry out their duties or to abide by the law.

In some instances, a grantor may include “advance directives” in their POAPC. Advance directives are more commonly known as “wishes” and they serve to provide personal instructions to attorneys about the grantor’s personal preferences regarding personal care and health care. An attorney is legally obligated to follow these wishes, if possible.

If you have been appointed under a Power of Attorney and/or have any additional questions please consult a TEP.