Power of Attorney for Property in Ontario: What Powers It Gives

A power of attorney for property lets someone you trust manage your money and assets if you cannot, or do not want to, do it yourself. People usually look into it when they are planning ahead, or when a parent's health is changing and bills, bank accounts and a house need attention.

This article explains what powers an attorney for property has, when those powers start, what the attorney cannot do, and the rules for signing the document. Your wording and family situation matter, so a lawyer can confirm how it applies to you.

What an attorney for property can do

The person you name is called the attorney, and you are the grantor. Under a continuing power of attorney for property, the attorney may do anything about the grantor's property that the grantor could do if capable, except make a will.

In plain terms, that can include dealing with bank accounts, paying bills and handling investments or real estate. The document itself can set conditions or limits, so it is worth reading the wording rather than assuming the powers are unlimited. The authority described here concerns the grantor's property. How the document applies to other kinds of decisions depends on its wording and your situation, so it is worth confirming with a lawyer.

Think of the document as handing over the day-to-day management of your financial life. Because the attorney may do anything you could do with your property apart from making a will, the choice of person matters a great deal. Honesty, good judgment and a willingness to stay organized are worth more than a title or a place in the family.

What the attorney cannot do

• Make a will for the grantor.
• Act outside the limits or conditions written into the document.
• Use the grantor's property for their own benefit; the attorney must act for the grantor's benefit.

The limit on making a will is worth noticing. Whatever else the attorney handles, the attorney cannot make a will for you. Questions about what happens to your estate after death are separate, and a lawyer can help you think them through.

When the power takes effect

An attorney for property can act right away unless the document says otherwise. The power of attorney may instead take effect on a specified date or when a specified contingency happens, such as the grantor's incapacity.

If you choose a contingency, think about how it will be proved. A clear description helps avoid delays and arguments with banks later.

Which option suits you depends on your circumstances. Starting right away can be practical if you want help with paperwork now, while a contingency may feel more comfortable if you want to stay in charge until you need help. Either way, make sure the document says what you intend, because unless it says otherwise the attorney can act right away.

Who can make one and how it is signed

To make a power of attorney for property, a person must be mentally capable and at least 18 years old. A continuing power of attorney for property must be signed in the presence of two witnesses, and each must sign.

Some people cannot act as a witness:

• The attorney, or the attorney's spouse or partner.
• The grantor's spouse or partner.
• The grantor's child.
• Anyone under 18.

Getting the witnessing wrong can create problems when the document is needed most, so check who is in the room before anyone signs.

Because capacity is the starting point, planning while you are well gives you time to choose suitable witnesses calmly instead of in a crisis. How these rules apply to a particular family can vary, so a lawyer can confirm your situation.

The attorney's duties, and what to do next

An attorney under a continuing power of attorney is a fiduciary who must act diligently, honestly, with integrity and in good faith for the grantor's benefit. The attorney may take annual compensation under the prescribed fee scale. Keeping records of every transaction is a sensible habit.

It helps for you and the attorney to talk openly before signing about expectations, including how records will be kept and shared with family, and whether the attorney will take compensation.

• Decide who you trust, and name a backup in case your first choice cannot act.
• Decide whether the power starts now or only on a specific event.
• Choose two witnesses who are allowed to witness.
• Tell the attorney where the signed original is kept.
• Have a lawyer review the document if your property, family or wishes are complicated.

Frequently asked questions