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What Happens When You Don’t Have a Power of Attorney

A Continuing Power of Attorney for Property and a Power of Attorney for Personal Care are simple but powerful documents. In short, a Power of Attorney is a document in which the grantor appoints another person – the attorney – the power to act on the grantor’s behalf including in the event the grantor is incapable of doing so themselves (although an attorney for property can also act when the grantor is still capable if the grantor wishes). An Attorney for Property can step in and manage the grantor’s financial affairs, whereas an Attorney for Personal Care can make personal care decisions on behalf of the grantor.

In the absence of a Power of Attorney for Property, there is no one who is legally able to step in and make these decisions for you in the event you become incapable of managing your assets.

In the absence of a Power of Attorney for Personal Care, in Ontario, the Health Care Consent Act, 1996, sets out a hierarchy of who could make personal care decisions on your behalf, however this may not be someone you would choose, nor does it cover all types of personal care decisions.

Instead, one or more of your loved ones will need to seek an appointment by the Court for a guardianship of property and potentially of the person to be able to make financial and personal care decisions on your behalf.

Unfortunately, this is not a simple process and can be quite costly. The proposed guardian or guardians will need to show the Court why a guardianship is needed and why they are the best option to act as a guardian. There must be evidence of incapacity which typically, though not always, requires a capacity assessment from a physician or licensed capacity assessor.

A major component of the guardianship application is showing the Court how the proposed guardian intends to manage the incapable person’s affairs. This involves the preparation of a detailed management plan and a guardianship plan.

The proposed guardian for property will need to prepare and submit a management plan for the Court’s approval which sets out the incapable person’s assets, income, expenses, and so forth, and how they intend to manage the incapable person’s affairs in the short-term and the long-term.

Similarly, the proposed guardian of the person will need to prepare and submit a guardianship plan that outlines, among other things, an overall health care plan, living arrangements, employment and education goals, and recreational activities for the incapable individual, as applicable.

In Ontario, the Office of the Public Guardian and Trustee (the “PGT”) must also be notified of the guardianship application. The PGT’s role is to protect the interests of the incapable person and to assist the Court by its review of the management plan and guardianship plan. The PGT may approve the proposed plan, or may request changes or conditions for the guardian to follow, including a requirement for the guardian to pass their accounts at certain times or to post a bond.

If the guardian’s appointment is approved by the Court, the guardian is required to follow the management plan or guardianship plan. Any significant changes in the circumstances of the incapable person would require that the guardian amend and re-submit their plan for approval.

There could also be competing guardianship applications if another person thinks they are a better choice for a guardian, or if another family member opposes the guardian’s application, in which case the process becomes more complicated.

Even the most “simple” guardianship applications can be costly, time-consuming, and lengthy.

All of this can be avoided by the use of a Continuing Power of Attorney for Property and a Power of Attorney for Personal Care. By preparing these documents, you are not only helping your loved ones and saving them the stress and the extra work of a Court process that could have easily been avoided, but you also have a say in who you want and who you trust to manage your financial assets and your personal care in the event you become incapable.

Another quick note on the importance of Powers of Attorney – don’t forget separate-situs Powers of Attorney if you have assets in or spend a lot time in another jurisdiction. Laws in different countries or even different provinces and territories are not always compatible. There is always a risk that your Power of Attorney documents may not be effective or recognized in another jurisdiction.

— O’Sullivan Estate Lawyers

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.