Have you ever considered what happens if the person you named in your Continuing Power of Attorney for Property (“POAP”) document becomes incapable? In a typical lawyer-like manner, the answer depends on the situation.
When you create a POAP, you are called the “grantor” because you are “granting” the named attorney for property (the “attorney”) authorization to step into your shoes and handle your property (minus making you a new will) should you become incapable yourself. If your attorney then also becomes incapable, it is possible under section 12(1) of the Substitute Decisions Act, 1992, S.O. 1992, c. 30(the “SDA”) that your POAP could be terminated entirely.
This article will offer different scenarios of what could happen based on what your POAP document sets out.
1. When the Power of Attorney names multiple Attorneys and/or an Alternate Attorney
You can name multiple people as attorneys in a POAP. If your POAP names two or more attorneys to act jointly at the same time, then there is no issue if one becomes incapable. Section 7(5) of the SDA provides that the remaining attorney(s) who are able to continue with their responsibilities are authorized to act, unless the POAP document provides otherwise.
The same is true if a POAP document names an alternate or substitute attorney. Often, POAPs will name an alternate or substitute attorney, in case the original is unable or unwilling to act. Should the original named attorney become incapable, the alternate named attorney may now step in and act.
2. (a) When there is only one Attorney or only one now acting and someone is able to apply for guardianship
If your POAP only names one attorney, or names multiple but only one attorney is left acting, then if your attorney becomes incapacitated, no one else can step in without a court order. As s. 12(1) of the SDA says, the POAP is terminated in this case and is no longer in effect.
If someone then wants to act as your attorney for property and manage your property and finances, they must make an application to the court to be formally appointed as a guardian of property.
If the attorney is not incapable, but wants to resign and is the last one standing, that is a separate issue. See here for more information on resigning as an attorney of property.
2. (b) When there is only one Attorney or only one now acting and no one is able to apply for guardianship
If there is no one able or willing to apply to be your guardian of property after the POAP terminates, then the Ontario Public Guardian and Trustee (“PGT”) may take steps to become your guardian for property.
If you have more questions about preparing a Power of Attorney for Property or require assistance when acting as attorney for property or about guardianship applications, please contact us.
This article is meant to provide a brief overview of what happens when an attorney becomes incapable and does not constitute legal advice. If you require legal advice, please contact us.