Do You have these Problems with Powers of Attorney?

Powers of Attorney can be tricky legal documents to prepare. This is especially the case for the elderly, who are often vulnerable. They need to trust and rely on others who could abuse their powers of attorney.

How do you stop a wolf in sheep’s clothing from stealing your money with a power of attorney? Simple – don’t put a stranger in charge. Name someone you trust as your attorney.

How can you protect yourself from power of attorney abuse? What terms and conditions could you put into a power of attorney to protect yourself?

I recently gave a seminar on powers of attorney. I explained how the law in Ontario had changed under the Substitute Decisions Act, 1992. Prior to this new legislation, most estate practitioners would put conditions into a power of attorney for property.

A typical condition that is no longer acceptable was worded like this:

“This power of attorney can only be exercised by my attorney if a medical practitioner certifies me as being incapable of managing my financial affairs.” [Note: this clause is not to be used]

Can this power of attorney clause protect you?


What does this clause mean?

Most medical practitioners are not qualified to certify someone financially incapable. They do not know the legal definition for financial competency. The definition appears in provincial legislation. In Ontario, this is the Substitute Decisions Act, 1992.

Section 6 of the Substitute Decisions Act, 1992 states:

Incapacity to manage property

6. A person is incapable of managing property if the person is not able to understand information that is relevant to making a decision in the management of his or her property, or is not able to appreciate the reasonably foreseeable consequences of a decision or lack of decision. 1992, c. 30, s. 6.

Lack of capacity to make financial decisions depends on the level of the decision-making.

A person may be capable of different levels of decision making. A person could write cheques but be incapable of realizing deposits must be made into a chequing account. They may not understand the consequences if they fail to take such steps.

This is by no means a summary of the statute. However, doctors must know the legal definition for capacity to apply it. Unless they are trained as assessors, doctors cannot usually offer opinions on capacity.

I recently received a one line letter from a busy doctor. All it said was,

“Mrs. K is capable of making her own financial decisions.”


All you wanted to know in a nutshell

But this piece of paper would not hold any water in court.

The judge wants to know on what basis the family doctor made this decision.

What tests did the doctor perform? Did the tests include a mini mental status examination?

Did the doctor ask the patient merely to identify a Looney, or Tooney, and give change from a $10 bill?

Did the patient correctly tell the doctor the time of day, the month and the year?

Was someone else prompting the patient?

A one line letter hardly constitutes an expert opinion.

Capacity to make legal decisions is a legal definition, not a medical one.

Doctors can be forgiven for not knowing this. They want to help.

Your lawyer must put necessary conditions in your powers or attorney.

Don’t think a one line letter will protect you from power of attorney abuse.

Want to read more about POAs?

Here is list of other POA posts and my free guide:

Prepare Powers of Attorney to Prevent Elder Abuse

New Power of Attorney Guidelines are Designed to Prevent Fraud

Powers of Attorney: 10 Essentials You Need to Know (Free Guide)

Edward Olkovich (BA, LLB, TEP, C.S.) is a recognized Canadian estate expert. He is a Toronto Certified Specialist in Estates and Trusts. Edward is the editor of Carswell’s text “Compensation and Duties of Estate Trustees, Guardians and Attorneys.” Ed has helped clients since 1978 and is the author of seven estate books. Visit for more free valuable information.

2013 © This information is not financial, legal, or tax advice. Seek professional advice before taking any action.