Power Of Attorney In Ontario – A Brief Guide

A Power of Attorney (POA) is a legal document through which an individual (the “grantor” or “principal”) authorizes another person (the “attorney” or “agent”) to act on their behalf. In Ontario, the Substitute Decisions Act, 1992, S.O. 1992, c. 30 (“Substitute Decisions Act, 1992”) governs the creation and operation of Powers of Attorney.  One can appoint anyone whether a spouse, relative, or a friend as their Power of Attorney.

A Power of Attorney can be executed for a variety of reasons including the management of financial matters, healthcare, medical, or family affairs. A Power of Attorney is a channel which helps individuals to keep their wishes and desires while protecting not their own future but also minimizing conflict between their loved ones.

Key Legal Requirements For A Valid Power Of Attorney Capacity Requirement

Under Ontario law, a valid POA requires that the grantor possesses the mental capacity to understand the nature and consequences of the document at the time of execution.

1. Written Instrument

A Power of Attorney must be in writing, oral POAs are not recognized under Ontario law.

2. Witnesses Requirement and Voluntariness

The POA must be signed in the presence of two witnesses, who are not beneficiaries under the document. This requirement reinforces the grantor’s capacity and confirms that the execution is voluntary.

3. Description of Scope and Limitations of Authority

The POA should clearly define the scope of authority granted to the attorney, including any limitations or conditions, to prevent misuse and ensure the grantor’s intentions are upheld.

4. Fiduciary Obligations

Attorneys owe a fiduciary duty to act in the grantor’s best interests, with honesty, integrity, and diligence. In Bellefeuille v. Bellefeuille [2018 ONSC 6802], the court emphasized that terminating a POA requires “strong and compelling evidence” of misconduct or mismanagement. The decision highlights that misuse of finances or self-dealing may lead to removal of the attorney. As noted by the Ontario Superior Court of Justice: “An attorney for property must be in a position, at all times, to prove the legitimacy of disbursements made on behalf of the estate of the incapable person.” [para. 4]

Common types Of Power Of Attorney

Typically, there are four types of Power of Attorney in Canada:

1. General Power of Attorney

A General Power of Attorney can include a wide range of obligations towards the Principal and their beneficiaries including finance management, medical matters, and estate matters. In this category, the principal can impose specific restrictions on the agent’s authority. This is generally used when the Principal has to stay away or is unable to act himself/herself for an extended period. It is effective only while the grantor is mentally capable and terminates upon incapacity.

2. Power of Attorney for Property

Governed by Section 7 of the Substitute Decisions Act, 1992 this grants the attorney authority to manage the grantor’s financial affairs, including but not limited to, the management of real and personal property, banking transactions, and investment matters.

3. Enduring/Continuing Power of Attorney

A Continuing Power of Attorney remains in effect even if the grantor becomes mentally incapable. It must explicitly state the intention to remain valid upon incapacity, as per Section 7(2) of the Substitute Decisions Act, 1992.

4. Power of Attorney for Personal Care

This POA enables the attorney to make healthcare and personal care decisions on behalf of the grantor if they become incapable, in accordance with Sections 45–47 of the Substitute Decisions Act, 1992.

Contact The Lawyers At Ayaz Mehdi Professional Corporation!

A well-drafted Power of Attorney is an essential tool for ensuring clarity and minimizing future disputes. Ambiguities or poorly drafted Power of Attorney can lead to significant complications. For legal advice tailored to your specific needs and circumstances, reach out to us!

Disclaimer:  Kindly note that sending or receiving information through this site does not establish a solicitor-client relationship. Legal matters are fact-specific, and the law is variably changing. The views expressed and the content provided on this blog are general guidelines and cannot substitute for proper legal advice. Schedule your legal consultation by clicking here: Let’s meet!