Powers of Attorney – What Are They and How Do They Work?

A Power of Attorney is a document in which you give to someone else (your “attorney”) the right to make decisions for you in the event that you are no longer capable of making decisions on your own.

 

There are two types of Power of Attorney:

 

  1. Power of Attorney for Personal Care – The person you name is able to make decisions about your health care, housing and other aspects of your personal life if you are incapable of making these decisions.

 

  1. Power of Attorney for Property – the person you name is able to make decisions about your financial affairs (eg, paying bills, collecting money owed to you, maintaining or selling your house, making investments, etc.).

 

If you do not have a power of attorney and you become incapable, other arrangements will have to be made.  A family member may be able to make certain personal care decisions for you and can apply to become the guardian of your property.  If no one is available to act for you, the government may act through the Office of the Public Guardian.

 

Power of Attorney for Personal Care

 

A power of attorney for personal care becomes effective when you are living, but incapable of making your own decisions.

 

The Attorney for Personal Care may have the following powers:

 

  • The right to exercise custodial powers over the incapable person and determine living arrangements;

 

  • The right to instruct a lawyer, settle claims and begin and settle proceedings (in certain circumstances);

 

  • The right to have the same access to personal information (including health information and records) as the incapable person could access and the right to consent to the release of that information (with some exceptions);

 

  • The right to make decisions about healthcare, nutrition and hygiene; and

 

  • The right to make decisions about employment, education, training, social services, etc.

 

Power of Attorney for Personal Care and Compensation

 

The Substitute Decisions Act, 1992, SO 1992, c 30 provides that regulations may be enacted to provide guidelines for compensation for an attorney under a power of attorney for personal care.[1]  However, regulations have not been enacted for powers of attorney for personal care (unlike for property).  Courts have awarded compensation for powers of attorney for personal care.  However, the process to determine compensation is cumbersome and expensive.  It is more convenient if the grantor includes a specific provision in the written document confirming the right to compensation, the amount, or a method for determining the amount, of compensation.

 

Power of Attorney for Property

 

There are two kinds of powers of attorney for property:

 

  • A continuing power of attorney for property which allows the grantor to deal with your property if you become incapable. In order for a power of attorney for property to be a continuing power of attorney for property, it must state that it is a Continuing Power of Attorney for Property and it must express the grantor’s intention that the authority given may be exercised during the grantor’s incapacity.

 

  • A power of attorney for property (or a non-continuing power of attorney for property), which cannot be used by your attorney if you become incapable.

 

A Continuing Power of Attorneys for Property becomes effective on the grantor’s incapacity or on the happening of some other triggering event (eg, the grantor provides specific written instructions).

 

Powers of attorney for property are allowed to do anything the incapable person could do except make a Will.  Attorneys are able to: open and close bank accounts, redirect income, apply for government benefits or supplementary income, deal with investments, collect debts, pay bills, start or defend lawsuits related to property, etc.

 

Continuing Power of Attorney for Property and Compensation

 

The SDA provides that a power of attorney for property may take compensation in accordance with a prescribed fee scale.[2] The fee scale provides compensation of:

 

  • 3% on capital and income receipts;

 

  • 3% on capital and income disbursements; and

 

  • 3/5s of 1% on the annual average value of the assets as a care and management fee.

 

Despite the scale, the grantor may vary or fix the compensation for the attorney in the document itself.

 

[1] Paragraph 90(1)(c.1).

[2] Subsection 40(1).