QUESTIONS AND ANSWERS ABOUT POWERS OF ATTORNEY

1.What is a Power of Attorney?

A Power of Attorney is a document which authorizes another person or persons to act on your behalf. It can be general, authorizing the named attorney(s) to do almost anything you can do, or it can be restricted. Restrictions may limit that authority in a variety of ways, including: a.acting on your behalf with respect to a specified matter (such as the closing of a house purchase while you are out of town); b.acting on any matter on your behalf, with a certain specified period of time; c.acting on any matter on your behalf, with certain specified exceptions; or d.acting on any matter on your behalf, but only upon the happening of a specified event (such as your loss of mental competence).

2.Why Should I have a Power of Attorney?

A Power of Attorney is a simple and inexpensive means of choosing a person or persons to deal with your property on your behalf, in the event that you should lose your mental capacity, whether as a result of accident, illness or progressive disease.

3.What happens if I become mentally incompetent, but I have no Power of Attorney?

One of two things will happen, depending on the particular circumstances. Firstly, a member of your family may make an application to court, asking to be appointed to act on your behalf. However, this approach can be expensive. Furthermore, you have no control over whom the court ultimately appoints. In certain other circumstances, the Public Trustee of Ontario (a government official) may take control of your property. While the Public Trustee is required to act in your best interests, the fact is he is a stranger to you and your family and may well make decisions that neither you nor your family would find very satisfactory.

4.I already have a Power of Attorney at my bank, appointing my husband to act on my behalf. Do I need another one?

The Power of Attorney which the bank had you sign is limited to dealing with matters at the particular bank. It will be of no use in dealing with other property you have. For example, if it should be necessary for your shares in a company to be sold, the bank's Power of Attorney would not give your husband the authority to do so.

5. I executed a Power of Attorney many years ago, appointing my brother as my attorney. Does a Power of Attorney become invalid after a period of time?

While a Power of Attorney does not "expire" with the passage of time, if your Power of Attorney was executed a number of years ago, an old form of Power of Attorney may have been used, with the result that the Power of Attorney will become invalid in the event that you should lose your mental competence! For that reason, you should have your lawyer review the Power of Attorney to see if that is a problem and, if so, have a new one drawn.

6.I have property located outside of Ontario. Can my Ontario Power of Attorney be used to deal with it?

The authority of a named attorney to deal with your property outside of Ontario will depend on the nature of the property and the jurisdiction in which it is located. To be on the safe side, it would be prudent to discuss this matter with a lawyer in the jurisdiction where the property is located.

7.Can the person named in my Power of Attorney make decisions concerning proposed mental treatment if I am unable to give consent due to mental incapacity?

The authority granted by your Power of Attorney is limited to matters relating to your property. A few years ago, the government passed legislation which allows a person to designate a surrogate decision-maker for personal care (sometimes called a “living will”). It is usually a separate document from your Power of Attorney for Property.

8.How do I choose an attorney to act on my behalf?

Deciding who should be able to deal with your property if you become mentally incompetent can be a difficult decision. In many cases, a close family member is an appropriate choice. You must be confident that, if you should become mentally incompetent, your attorney will act honestly, in good faith and exercise good judgment, even if the exercise of that judgment would not necessarily lead to the same decisions or actions you would have taken in the circumstances. Setting out your views and philosophy in a memorandum or letter to your attorney may be helpful to your attorney in making decisions with which you would be content.

9.Can I make a Power of Attorney now, but put it away until it is needed (that is, which I become mentally incompetent)?

The problem with this approach is that a Power of Attorney is not effective until it is delivered to the named attorney. You cannot deliver it once you have become mentally incompetent. Your loss of competence may come on without any warning and, if you have not yet delivered it to your attorney, it will be too late to do anything about it.

10.If I deliver my Power of Attorney, how can I be sure that the named attorney will not use it without my knowledge or consent?

Obviously, this becomes a matter of trust and you must be confident that the person you have chosen to act as your attorney will not exercise the authority against your wishes or your interest. An attorney who does not act in good faith in dealing with your property will be accountable to you in law.

11.Can I include a restriction in the Power of Attorney to the effect that it is not to be used unless I am mentally incompetent?

Such a restriction can be included in the document, but you would be wise not to as it may cause problems for your attorney when he or she attempts to use it. How will that third party know whether or not the requirements in your Power of Attorney have been satisfied? If time is of the essence for the attorney to act on your behalf (say, for example, selling property of yours in a rapidly falling market), the resulting uncertainty over whether or not the condition has been met could be financially disastrous.

12.Is there anything I can do if I am uncertain about giving an unrestricted Power of Attorney while I am still competent?

There are a number of ideas you might consider: a.give clear written instructions in a separate letter or memorandum to your attorney, advising him or her that although the Power of Attorney is unrestricted, you do not wish it to be used unless it is clear that you are unable to manage your own affairs; b.name two attorneys who must act jointly, thereby reducing the risk that the Power of Attorney will be used improperly; or c.lodge that Power of Attorney with a third party (such as your lawyer) with clear written instructions as to when it is to be released (for example, only if the named attorney provides the third party with a written opinion from a duly qualified medical practitioner attesting to the fact that you are no longer able to manage your financial affairs).

13.How can I revoke a Power of Attorney?

It is sufficient for you to deliver a signed document to the named attorney which expressly states that your Power of Attorney is revoked. You can revoke a Power of Attorney previously given only if you are mentally competent to do so at the time of revocation. It is wise to retrieve all original copies of the Power of Attorney, if possible, and also to communicate that revocation to those third parties (banks, stock brokers, etc.) with whom your named attorney might be likely to deal. Certain events will automatically revoke a Power of Attorney. The most significant of these is your death, although the named attorney may act, and third parties may rely, on the authority contained in the Power of Attorney if neither party is aware of your death at the time.

14.Does my attorney get paid for acting on my behalf?

Your attorney will certainly be entitled to be reimbursed for out-of-pocket expenses he or she incurs on your behalf. However, if you wish to establish a basis on which your attorney is to be compensated for the services he or she may provide, it should be set out in writing.

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