Understanding Powers of Attorney in Ontario: What You Need to Know

A power of attorney is one of the most important legal documents you can have, yet many Ontarians do not have one in place. If you become incapacitated due to illness, injury, or cognitive decline, a power of attorney ensures that someone you trust can manage your affairs. Here is what every Ontario resident should understand about powers of attorney.

What Is a Power of Attorney?

A power of attorney is a legal document that gives another person (called your attorney) the authority to act on your behalf. In Ontario, powers of attorney are governed by the Substitute Decisions Act, 1992. Despite the name, the person you appoint does not need to be a lawyer. It can be a family member, friend, or professional, as long as they are at least 18 years old and mentally capable.

The Two Types of Power of Attorney in Ontario

Ontario law recognizes two distinct types of power of attorney. The first is a Continuing Power of Attorney for Property, which authorizes your attorney to manage your financial affairs, including banking, paying bills, managing investments, buying and selling real estate, and filing taxes. The word "continuing" means it remains in effect even if you become mentally incapable. The second type is a Power of Attorney for Personal Care, which authorizes your attorney to make decisions about your health care, housing, nutrition, hygiene, clothing, and safety if you become mentally incapable.

When Does a Power of Attorney Take Effect?

A Continuing Power of Attorney for Property takes effect as soon as it is signed, unless you include a condition that it only takes effect upon your incapacity. A Power of Attorney for Personal Care only takes effect when you are determined to be mentally incapable of making the relevant decisions. This determination is typically made by a qualified health practitioner.

What Happens If You Do Not Have One?

If you become incapacitated without a power of attorney in place, your family will need to apply to the court to be appointed as your guardian. This process is time-consuming (often taking months), expensive (legal fees can run into thousands of dollars), and stressful for your loved ones at an already difficult time. Having powers of attorney in place avoids this entirely.

Choosing Your Attorney

Choosing who to appoint is one of the most important decisions. Your attorney should be someone you trust completely, who is willing and able to take on the responsibility, who lives close enough to manage your affairs practically, who is organized and financially responsible (for property matters), and who understands your values and wishes (for personal care matters). You can appoint the same person for both types, or different people. You can also appoint more than one attorney to act jointly or jointly and severally.

Reviewing and Updating Your Powers of Attorney

Powers of attorney are not set-and-forget documents. You should review them whenever your circumstances change — after a marriage, divorce, death of your named attorney, or a significant change in your assets. An outdated power of attorney can create as many problems as not having one at all. Ontario law also requires specific execution formalities (including two witnesses who meet certain criteria), so it is important to ensure your documents comply with the Substitute Decisions Act to avoid any challenge to their validity.