Legislation dealing with powers of attorney and substitute decision making came into force in Ontario on April 3, 1995. This legislation includes the Substitute Decisions Act, 1992 (the "SDA"). The SDA effects profound changes to the law and has far reaching implications. As a result, everyone who lives in Ontario or owns property in Ontario should be aware of it (property includes all one's property such as real estate, financial assets etc.) The following describes some of the highlights of the legislation.
power of attorney - what is it?
A power of attorney is a powerful document, in which one person (the grantor) gives to another person or institution (the attorney) the authority to manage the grantor's property. A power of attorney is typically given in order to ensure that if the grantor becomes mentally incapable of managing his or her own property, there will be someone, the appointed attorney, whom the grantor trusts who can step in and manage the property of the incapable grantor.
highlights of the SDA
office of the public guardian and trustee
The Office of the Public Guardian and Trustee, which is commonly referred to as the "PGT", is a government office established in Ontario to oversee the interests of those persons who are unable, due to mental incapacity, to manage their own property. If the person suffering from incapacity has not signed a power of attorney, while capable, appointing someone to manage his/her property in the event of incapacity, then under the SDA the PGT automatically becomes the statutory guardian of such person's property. Therefore, it is important that everyone have a power of attorney in place appointing someone they trust to manage their property in the event of incapacity in order to avoid the involvement of the PGT in their affairs.
continuing powers of attorney
Under the SDA, you may give a power of attorney for property(referred to as a "continuing power of attorney") to one or more persons to manage your financial affairs if you become mentally incapable. However, such a continuing power of attorney will only be effective if it expressly provides that it may be exercised in the event of your incapacity to manage your own property.
Under the SDA, there are circumstances in which the PGT will automatically be entitled to assume control of your property if you become mentally incapable, whether or not you have given a power of attorney to someone. Having said this, if you have given a valid continuing power of attorney to someone and such a circumstance arises, then the procedure for having the PGT step aside to allow the appointed attorney (typically a family member or trusted friend) to take over management of the incapable person's property is relatively straightforward. If you do not have a continuing power of attorney, it will be a much more complicated and costly process to replace the PGT.
powers of attorney for personal care
The SDA also introduced a relatively new kind of power of attorney (a power of attorney for personal care) that will allow your attorney to make decisions on your behalf in respect of personal matters such as health care, medical treatment, shelter, nutrition, hygiene and safety.
The power of attorney for personal care allows you to give instructions to doctors and loved ones concerning health care issues in the event that you subsequently become unable to make such decisions for yourself. Prior to the SDA coming into force, instructions of this nature were often given in so-called "living wills". Living wills, however, have little, if any, legal effect in Ontario. Accordingly, if you have a living will in place, as opposed to a power of attorney for personal care, there is no guarantee that your expressed wishes will be carried out as you intended. Therefore, it is recommended that everyone have a valid power of attorney for personal care made in accordance with the SDA which will have legal effect, in order to be satisfied that your intentions will be carried out accordingly.
duties imposed upon attorneys
The SDA clarified the law with regard to the standard of care imposed upon attorneys who are managing the property of another person or making personal care decisions for another person. The SDA also lists specific duties imposed upon attorneys. As a result, if you are acting as an attorney for another person, you should obtain legal advice as to how the SDA might affect you in carrying out your role and responsibilities, and so that you understand the nature and extent of your fiduciary responsibilities as attorney.
effect of the SDA on prior powers of attorney
What is the effect of the SDA on a power of attorney which you have signed prior to the SDA coming into force? If such a power was executed before or within six months after April 3, 1995 (the date the SDA came into force), it will be considered valid as long as it was properly executed and considered valid under Ontario's Power of Attorney Act, which was the governing legislation prior to the introduction of the SDA. To be considered valid under the Power of Attorney Act means that such power of attorney must expressly state that it may be exercised in the event you become mentally incapable. Powers of attorney given after the six month date and which do not comply with the express requirements of the SDA will be of no legal effect if you subsequently become mentally incapable.
In light of the SDA, if you have not already done so, it is more important than ever that you consider granting a power of attorney to one or more persons whom you trust to manage your property should you become unable to continue to do so. You should also think about whether it would be prudent to give a power of attorney for personal care to someone to ensure that if you become mentally incapable, someone you trust will be able to make personal care decisions for you and, if you express them in the power of attorney, your wishes concerning such things as medical treatment will be respected.