When Does a Power of Attorney for Property Take Effect in Ontario?

Families often ask the same question when a parent's health declines: can the person named in the power of attorney step in yet, or do they have to wait? The answer is not the same for every document, and acting too early or too late can cause real problems.

This article explains the general rules in Ontario for a power of attorney for property: the default timing, how a document can change it, what happens when incapacity is the trigger, and how capacity is assessed. It does not cover misuse of a power of attorney or challenging an attorney.

The starting point: right away unless the document says otherwise

An attorney under a property power of attorney can start making financial decisions immediately unless the document says otherwise. Many people assume the power only begins once a parent is ill, but that is not the default. The grantor must have been at least 18 to make a power of attorney for property.

This is why the exact wording matters. Two documents that look similar can start at very different times, so read the clause about when the power begins before anyone acts.

What makes a power of attorney continuing and valid

A power of attorney is called continuing if it says the authority can be used while the grantor is incapable of managing property. It is valid if the grantor was capable of giving it when it was signed.

A continuing power of attorney must be signed in the presence of two witnesses, who each sign. The attorney, the attorney's spouse or partner, and anyone under 18 are among those who cannot witness.

• Check that the document says it is continuing, or that it can be used during incapacity.
• Check that two witnesses signed and that neither is on the list of people who cannot witness.
• Check the clause that says when the power starts.

Springing powers of attorney: a date or an event

A continuing power of attorney may say it comes into effect on a set date or when a specified contingency happens. This is often called a springing power of attorney. Until that date arrives or the stated event occurs, the attorney would not have authority under that document.

The contingency should be read exactly as written. If you are unsure whether the stated event has happened, a lawyer can review the wording and the facts.

When it starts on incapacity but gives no method

Some documents say they take effect when the grantor becomes incapable but do not explain how that is decided. In that case, the power takes effect when the attorney is notified in the prescribed form by an assessor that the grantor is incapable, or that a certificate of incapacity has been issued.

The legal test is about managing property. A person is incapable of managing property if they cannot understand information relevant to decisions about their property, or cannot appreciate the reasonably foreseeable consequences of a decision or lack of decision. A bad decision, or a decline in memory, does not by itself answer that question.

How capacity assessments work

Capacity assessors are trained health professionals, such as doctors, nurses, psychologists, social workers and occupational therapists. An assessment cannot be done if the person refuses, unless a court orders it. Usually the person who asked for the assessment pays the assessor.

Capacity can depend on the decision involved, so a family should not assume a single conversation settles it. An assessment gives a structured, professional view.

Duties once the grantor is incapable, and what to do next

When the grantor is incapable, an attorney under a continuing power of attorney takes on the guardian's duties. These include acting as a fiduciary diligently, honestly and in good faith, keeping accounts, and being liable for damages for breach of duty.

• Find the original document and read the timing clause closely.
• Confirm it is continuing and was properly witnessed.
• Note whether it starts immediately, on a date, on an event, or on incapacity.
• If incapacity is the trigger, find out whether the document sets out how it is decided.
• Start keeping clear records of every transaction from day one.
• Speak with a lawyer if the wording is unclear or family members disagree.

Frequently asked questions