Continuing Power of Attorney for Property in Ontario

On the first Sunday of every month, a 76-year-old retired railway machinist in Peterborough opens a green cloth ledger on his kitchen table and ticks each line against his bank statement. This spring his niece pulled up a chair for the ritual. She was not there to take anything over. He had asked her to learn the system, because he has decided she is the person he wants carrying the ledger forward if a day comes when the columns stop making sense to him. His son in Ottawa would like a role as well. Over a second pot of tea, the conversation landed on a practical question: what does Ontario actually expect from the paper that hands someone the ledger?

The answer lives in the Substitute Decisions Act, 1992. Its vocabulary takes a minute to settle into. You are the grantor. The person you choose is your attorney, which here simply means the person holding the authority, not a lawyer. And a document built to keep working after you lose the ability to manage your money is a continuing power of attorney for property. For a side-by-side look at how other provinces handle the same idea, our Canadian guide to powers of attorney for property is the place to start. This article stays with Ontario.

The words that make it "continuing" #

Ontario does not treat every power of attorney for property as one that survives incapacity. Under s. 7(1), it generally counts as continuing if it either states that it is a continuing power of attorney, or shows an intention that the authority can be used while the grantor is incapable of managing property.^[NaN] A document lacking both features may not carry over into the very period most families are planning for.

The Act is relaxed about layout. Section 7(7.1) says the document need not follow any particular form, while s. 7(8) confirms the prescribed form may be used.^[NaN] What it can cover is wide. Under s. 7(2), the attorney may be authorized to do anything with your property that you could do yourself if capable, with one carve-out: the attorney cannot make a will for you.^[NaN] In the machinist's case, his niece could deal with the bank, pay the property tax and move money between accounts, but his will would remain his own business.

What you need to understand at the moment you sign #

Section 8(1) sets out the understanding a person generally needs to give a continuing power of attorney. Put in everyday terms, you should grasp:^[NaN]

• roughly what you own and what it might be worth;
• that people who depend on you are owed something by you;
• that your attorney will be able to handle your property in nearly every way you could, subject to any limits you write in, but not by making a will;
• that the attorney has to account for how your property is handled;
• that you can cancel the document while you are still capable;
• that careless management could shrink the value of what you own;
• that an attorney could abuse the authority.

One detail surprises people. Under s. 9(1), the document is generally valid if you were capable of giving it when you signed, even if by then you were no longer capable of managing your property day to day.^[NaN] The two tests are separate, which is part of why a family conversation like the one in Peterborough is worth having early.

One attorney, two, or the Public Guardian and Trustee #

Part I of the Act applies to decisions made for people who are at least 18 (s. 4), and the person exercising the authority must also be at least 18 (s. 5).^[NaN] Beyond age, the main decision is how many people to name and how they work together.

Here the default matters. Under s. 7(4), where two or more attorneys are named, they generally act jointly unless the document says otherwise.^[NaN] If the machinist names both his niece and his son and leaves it there, the two of them would ordinarily need to agree on, and sign for, each transaction, with one of them living four hours away. If he would rather let either act alone, the document has to say that. Our piece on naming more than one attorney walks through the trade-offs.

People without a suitable relative or friend have another route. Section 7(3) allows the Public Guardian and Trustee to be named, provided its written consent is obtained before the power of attorney is signed.^[NaN]

Choosing when the authority switches on #

A continuing power of attorney does not have to take effect the day it is signed. Section 7(7) lets you set a specific date or a particular event as the trigger.^[NaN]

If you pick incapacity as the trigger but say nothing about how incapacity will be confirmed, the Act fills the gap. Under s. 9(3), the document then generally takes effect when your attorney is notified, in the prescribed form, that an assessor has assessed you and found you incapable of managing property, or is notified that a certificate of incapacity has been issued under the Mental Health Act.^[NaN] If that default route does not suit you, the document can set out its own method.

Two witnesses, chosen with care #

Section 10(1) generally requires a continuing power of attorney to be signed in front of two witnesses, each of whom signs as a witness.^[NaN] The harder part is the list of people who are not allowed to fill that role. Under s. 10(2), the following generally cannot witness:^[NaN]

1. the attorney, or the attorney's spouse or partner;
2. the grantor's own spouse or partner;
3. a child of the grantor, or someone the grantor has shown a settled intention to treat as a child;
4. a person whose property is under guardianship or who has a guardian of the person;
5. anyone under 18.

Run the Peterborough family through that list and nearly everyone at the table is ruled out: the niece as attorney, the son as both child and possible attorney, and the son's wife as an attorney's spouse. The neighbours across the road, if they are adults with no connection to the document, are a far safer pair.

If the witnessing goes wrong, s. 10(4) generally makes the document ineffective, though a court may declare it effective on application where that serves the interests of the grantor or the grantor's dependants.^[NaN] That is a rescue, not a plan.

What the attorney owes you once you are incapable #

When the grantor is incapable of managing property, or the attorney has reasonable grounds to believe so, s. 38(1) applies key guardian-of-property duties to the attorney.^[NaN] The core one comes from s. 32(1): a fiduciary obligation to act diligently, honestly, with integrity and in good faith, for the benefit of the person who can no longer act.^[NaN]

Two other provisions shape the relationship. Section 40(1) allows an attorney under a continuing power of attorney to take annual compensation from the property according to the prescribed fee scale.^[NaN] And under s. 42(1), a court may order that all or part of an attorney's accounts be passed, meaning formally reviewed.^[NaN] For the niece, the green ledger is more than a habit; tidy records are the sort of thing that makes an account easy to explain.

Replacing or ending the document #

Section 12(1) lists the ways a continuing power of attorney generally comes to an end. They include the attorney dying, becoming incapable or resigning (unless another attorney or a named substitute can carry on), a court appointing a guardian of property, the grantor signing a new continuing power of attorney without saying that more than one is intended, revocation, and the grantor's death.^[NaN]

If you decide to cancel, s. 12(2) generally requires the revocation to be in writing and signed with the same formalities as the original, including the two witnesses.^[NaN] Under s. 8(2), you can revoke it as long as you have the capacity you would need to make one.^[NaN]

Your health and personal-care decisions are a separate matter. Part II of the same Act deals with a power of attorney for personal care, which covers decisions about your personal care rather than your property.^[NaN] Our guide to advance care directives in Ontario covers that side of the planning.

Where the will fits in #

Because a continuing power of attorney generally ends when the grantor dies, it hands over to your will at that point.^[NaN] Your estate trustee, not your attorney, then deals with what you leave behind. Our step-by-step guide on how to write a will in Ontario covers the formal requirements, and the Ontario estate trustee guide describes what that person does next. If you want a feel for what probate could cost based on the value of what you own, the probate fee calculator gives an estimate, and our Ontario will planning hub gathers the province's material in one place.

The machinist's ledger works because he has kept it the same way for decades. Your estate plan works the same way when the power of attorney and the will are made with each other in mind. When you are ready to put the will side of your plan on paper, you can begin your will with It's Simple Will.