Powers of attorney in Ontario are the most consequential documents most people never get around to signing. A will governs what happens after death. A power of attorney governs what happens while you are alive but unable to make decisions for yourself, which is a situation far more likely to arise and far more disruptive when no document exists. Without one, family members who need to pay your bills or make medical decisions may have to apply to court for guardianship, at real cost and delay. Ontario provides for two distinct documents, and understanding the difference between them matters.
The Two Types of Power of Attorney in Ontario
Both are created under the Substitute Decisions Act, 1992. They cover different ground and are not interchangeable.
A continuing power of attorney for property deals with money and assets: banking, bills, investments, real estate, and dealings with government. Under section 7(1), a power of attorney for property is a continuing power of attorney if it states that it is one, or if it expresses the intention that the authority given may be exercised during the grantor’s incapacity to manage property. That word continuing is what allows it to survive incapacity. A power of attorney for property that is not continuing stops working at precisely the moment it is most needed.
A power of attorney for personal care is the second document. Under section 46(1), a person may give a written power of attorney for personal care authorising the named attorney to make decisions concerning the grantor’s personal care: health care, housing, nutrition, safety and clothing. Section 46(3) restricts who may act. A person who provides health care, residential or other listed care to the grantor for compensation cannot be the attorney unless they are the grantor’s spouse, partner or relative. A paid caregiver cannot simply be appointed.
Appointing the same person to both roles is common but not required, and it is worth asking whether the person best suited to managing an investment portfolio is also the person you want at a hospital bedside.
Capacity: The Requirement That Cannot Be Fixed Later
Section 2(1) presumes that a person eighteen or over is capable of entering into a contract, and section 2(2) presumes that a person sixteen or over is capable of giving or refusing consent in connection with their own personal care. Capacity is presumed, not assumed away.
The two documents have different capacity thresholds, and the property one is higher. Section 8(1) sets out what a person must be able to do to grant a continuing power of attorney for property: know what kind of property they have and its approximate value; be aware of obligations owed to dependants; know that the attorney will be able to do anything with the property that the grantor could do, except make a will; know that the attorney must account for their dealings; know that the grantor may revoke while capable; appreciate that the property may decline in value if not managed prudently; and appreciate that the attorney could misuse the authority.
Section 47(1) sets a notably lower threshold for personal care: the person must be able to understand whether the proposed attorney has a genuine concern for their welfare, and appreciate that they may need that person to make decisions for them. A person who no longer meets the property test may still be capable of appointing someone to make personal care decisions.
The practical point is unforgiving. Capacity must exist at the moment of signing. Once it is gone, these documents can no longer be made, and the only route left is a court guardianship application.
Signing Requirements and Who Cannot Witness
Section 10(1) requires that a continuing power of attorney be executed in the presence of two witnesses, each of whom signs as a witness. Section 10(2) sets out who may not act as a witness: the attorney or the attorney’s spouse or partner; the grantor’s spouse or partner; a child of the grantor or a person the grantor has demonstrated a settled intention to treat as their child; a person whose property is under guardianship or who has a guardian of the person; and anyone under eighteen.
That list catches households. The obvious people in the room when these documents are signed are frequently the very people disqualified from witnessing them.
A power of attorney is not permanent. Section 12 sets out how a continuing power of attorney terminates, including where the attorney dies, becomes incapable of managing property or resigns without a substitute named, where the court appoints a guardian of property, and where the grantor executes a new continuing power of attorney.
What to Do About Powers of Attorney in Ontario
Prepare both documents, and prepare them while capacity is not in question. Waiting until a diagnosis arrives is waiting too long.
Name a substitute attorney. The most common failure in practice is a document naming one person who has since died, moved away, or become unwilling to act. Consider whether attorneys should act jointly or separately, because a joint requirement can paralyse decisions when one attorney is unreachable.
Talk to the person you are appointing. Being handed this authority unannounced, in a crisis, serves nobody. Tell them where the document is kept and what you would want.
Review the documents periodically and after any change in relationships. And be clear on what these documents do not do: an attorney for property cannot make a will for you, and neither document operates after death, when authority passes to the estate trustee.
If you need powers of attorney prepared in Ontario, George Habib, wills and estates lawyer at Habib Legal Counsel, will make sure the right documents are in place before they are needed. Visit HabibLC.com or call anytime at 647-648-2164 — George Habib and his firm are ready to help.
George Habib | Habib Legal Counsel | Wills & Estates | 647-648-2164 | Contact us
