When The Unexpected Happens, How Can You Protect Your Money While You’re Alive? Part 1

When the unexpected happens, you need to be ready to protect your money and family.

You can prepare for the unexpected, an accident or injury, by having a substitute decision maker designated in a power of attorney. This person can take your place immediately or when you no longer can manage your money and property.

Powerful Powers of Attorney for Property

How do you designate a substitute decision maker for property? In Ontario, you sign a legal document with two qualified witnesses.

There is no standard form for this legal document called a power of attorney in Ontario. But it has a name. It is called a continuing power of attorney for property (CPOAP). This means it continues to be valid in case you become mentally incapable.

To grant a CPOAP, you must have legal capacity. This is a legal definition. As grantor of the COPAP, you must understand what property you have and your obligations and your must appreciate that your attorney can misuse their authority.

Capacity To Give Continuing Power of Attorney

Section 8(1) of Ontario’s Substitute Decisions Act, 1992, S.O. 1992 states:

8 (1) A person is capable of giving a continuing power of attorney if he or she,
(a) knows what kind of property he or she has and its approximate value;
(b) is aware of obligations owed to his or her dependants;
(c) knows that the attorney will be able to do on the person’s behalf anything in respect of property that the person could do if capable, except make a will,
subject to the conditions and restrictions set out in the power of attorney;
(d) knows that the attorney must account for his or her dealings with the person’s property;
(e) knows that he or she may, if capable, revoke the continuing power of attorney;
(f) appreciates that unless the attorney manages the property prudently its value may decline; and
(g) appreciates the possibility that the attorney could misuse the authority given to him or her. 1992, c. 30, s. 8 (1).

There are certain fundamentals you must understand when you grant a CPOAP. Read my next blogs about powers of attorney for property.

If you do not have a power of attorney, do not think your family can make decisions for you with a valid power of attorney document. Your financial institutions have legal departments that review your power of attorney documents. They can refuse to accept the documents after speaking with you and your witnesses. They are always concerned about fraud. Documents can be altered and photoshopped.

If you make a do-it-yourself power of attorney online, you must be able to produce originals and contact information for your witnesses.

Usually, if you own real estate, you are best served by having lawyers prepare your powers of attorney for property.

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If you need help with powers of attorney, contact me or arrange a meeting.

Estate law is all I do.

Ed Olkovich