Ontario Power of Attorney for Property Options under the Ontario Substitute Decisions Act, 1992

Imagine Kevin, a scruffy-looking fellow walks into your bank on a Monday morning. He tells your bank manger he needs to use your Power of Attorney (POA). He wants to move all your money into his own bank account. He says he needs to do this immediately. He has to pay your overdue mortgage and condo fees.

Kevin hands over a paper with your signature. It is a homemade, do-it-yourself POA. It says he can only use it if you lack legal capacity and are assessed as incapable.

What problems do you see?

First, the bank’s legal department must review the document. They will look at how this “capacity” condition is worded. They must be satisfied before Kevin can use the POA. The bank wants to know – are you travelling? Are you in the hospital? Who prepared the POA? Can they contact the witnesses to verify your POA is not a forgery?

Second, in Ontario, only capacity assessors can make assessments. It can take weeks to obtain the required medical reports and capacity assessments.

Third, Kevin may actually be telling the bank the truth. You were in a car accident while vacationing out of the country. Kevin is your nephew and he needs to pay your bills. You signed a POA with restrictions. You may find these create undesired results and roadblocks.

Is this really what you want?

Power of Attorney for Property Options

You need to consider your POA options.

  • Make a POA that is only effective while you are out of the country.
  • Give someone rights to manage property, but not sell it.
  • Specify that you can make multiple powers of attorney. Create one to pay your bills and one to handle digital passwords or assets. You can make another POA to allow someone else to make investment decisions.
  • Restricted powers may not be required on all attorneys. (Presumably you would only name attorneys you trust.)
  • Discuss options with your estate planning lawyer. You may have property or personal needs that require more supervision by an attorney.
  • If you place too many burdens on your attorneys, they may refuse the job.
  • Always name a back-up attorney in case one resigns.
  • Specify attorneys can share financial information with certain relatives only.
  • State in the POA your attorney can use your money to pay for professional advice – otherwise, your attorney may be afraid to hire a professional advisor.

Remember, attorneys are bound by the rules imposed on all fiduciaries. They must put your interests before their own.

Summary: Power of Attorney Tips

1. Every family is different. How many of your family members should act as your attorney? Should they act jointly or individually? These are important decisions. Your lawyer can help you make them.

2. Powers of attorney are legal documents. They are subject to court review. POAs should be drafted by an experienced estate lawyer.

3. Financial institutions worry about power of attorney abuse. They will consider suspicious POAs not drafted by lawyers.

4. You need to meet with a lawyer to review your circumstances. In cases of blended families, having an independent review is crucial.

5. Deal with your own lawyer, not your proposed attorney’s.

6. Appreciate the risks of a POA, but take steps to stop possible abuse.

If you own real estate in Ontario, read my blog post about POA guidelines.

Read more about attorney responsibilities in my blog post, Attorney in Ontario – Record Keeping Responsibilities.

For more about POAs, read my guide, Powers of Attorney: 10 Essentials You Need to Know.

About Ed

Edward Olkovich (BA, LLB, TEP, and C.S.) has successfully resolved many estate disputes involving powers of attorney and capacity issues. These included contested court applications under Ontario’s Substitute Decisions Act, 1992. Ed is an Ontario lawyer, nationally recognized author and estate expert. He is a Toronto based Certified Specialist in Estates and Trusts. Edward has practiced law since 1978 and is the author of seven estate books, including Executor Kung Fu: Master Any Estate in Three Easy Steps. © 2013