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So, You Haven’t Made a Power of Attorney?

In our Advisory “Planning for Incapacity Using a Power of Attorney”, we discuss the benefits of having powers of attorney for personal care (medical and other care decisions) and for property (assets and financial decisions), and provide some information regarding powers of attorney and how they function in Ontario, including who can act as your attorney under a power of attorney and how to choose an attorney, among other matters.

You may already be familiar with the workings and benefits of powers of attorney, although many people are not. But do you know what happens if you fail to make a power of attorney?

In regards to both personal care and property decisions, the Ontario Substitute Decisions Act, 1992 (the “Act”) is the main governing legislation (although the making of certain types of personal care decisions are governed by the Ontario Health Care Consent Act, 1996).

Under the Act, if a person does not have a power of attorney for personal care and becomes incapable of making their own personal care decisions, it may be necessary for a family member to apply to Court to have a “guardian of the person” appointed to make decisions in regard to the incapable person’s health care, nutrition, shelter, clothing, hygiene and safety. Immediate or emergency medical decisions can be made by a family member, with the Act setting out a list of those persons who can make such decisions in order of priority.

Under the Act, if a person does not have a power of attorney for property which is effective after they become incapable (powers of attorney for property which are limited in scope and do not extend to a person’s incapacity can also be made, typically for business or financial transactions), it will be necessary for someone to apply to Court to have a “guardian of property” appointed to manage the incapable person’s financial affairs.

Unfortunately, the Court procedure for appointing either a guardian for personal care or of property can be both lengthy and expensive. A formal Court hearing is necessary, and a date for a hearing can take several months to obtain depending on which Court is involved and how busy the Court is at the time.

A detailed plan for how the incapable person’s assets, debts and income are to be managed in the case of a guardian of property application, or how the person’s care will be managed in the case of a guardian of the person application, must be completed as part of the application. The Office of the Public Guardian and Trustee, which is the Ontario Government entity tasked with protecting the rights of incapable adults in Ontario, must be served with the application, who will likely have comments and questions regarding the proposed management plan. Certain family members and interested parties must also be notified of and/or consulted about the application.

If there is a dispute about who should be appointed or the details of the management plan, the process will of course take even more time and be even more expensive.

Of course, a guardianship appointment by the Court does not allow you to choose who will manage your care or property or how it will be managed should you become incapable. Those matters will be determined by your family, other interested parties such as creditors, the Public Guardian and Trustee, and the Court.

It also involves Court and Government supervision of the management of your affairs, which adds additional expense and complexity for the person(s) appointed. Typically, for example, the guardian of property must pass his, her or their accounts in Court every so often. As your needs and circumstances change over time, the guardian must amend the management plan for care or property, by approval of the Public Guardian and Trustee or further Court application.

Powers of attorney are some of the easiest yet profoundly influential planning documents you can put in place to ensure that your wishes during any incapacity you may have in the future are carried out, while assisting your family and loved ones to deal with necessary matters in such circumstances.

Not having powers of attorney will have a real and measurable impact not only on your nearest and dearest, but on your own financial and physical well-being.

— Susannah Roth

The comments offered in this article are meant to be general in nature, are limited to the law of Ontario, Canada, and are not intended to provide legal or tax advice on any individual situation. Before taking any action involving your individual situation, you should seek legal advice to ensure it is appropriate to your personal circumstances.
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