What happens if a family member or spouse develops a cognitive or mental illness? Are you ready to assume care and financial responsibility for this family member? What options do you have and what steps should you be considering sooner rather than later?
Substitute decision making, consent and mental health laws provide the legal outline for assisting you, your spouse, or your family members who become incapable of making decisions for themselves. These laws are meant to balance the autonomy and self-determination of the person with the right of care, protection, and treatment for the person. They are also meant to balance the interests of community safety. With our country’s longer life expectancy, you, your spouse and your family members are likely to be at a greater risk of obtaining a chronic illness or a degenerative disease. The opportunity of executing a Power of Attorney when you have the mental capacity to do so should not be overlooked.
Before you become unable to look after your financial affairs or your own personal care, it is a good idea for you to assign legal responsibility for the management of your finances and your personal care to someone you trust. With a Continuing Power of Attorney for Property, you can ensure that someone who understands your financial goals will manage your property on your behalf. And with a Power of Attorney for Personal Care, you can ensure that you will receive the end of life medical care that you want.
How can someone else manage your finances?
A Power of Attorney is a legal document that you, your spouse, or your family member can use to allow someone of your choosing to manage your financial affairs if you become incapacitated. The person who becomes the attorney then has the authority to do anything with respect to property’ that you could do, except make a Will on your behalf. Therefore, it is very important that you prepare your own Will while you are still mentally capable.
In Ontario, under the Substitute Decision Act, the law presumes that all persons who are 18 years or older have capacity to enter into a contract unless there are reasonable grounds to believe that they are incapable of entering into the contract or of giving a gift. If there is any question that a person might not have capacity to enter into a contract, then a capacity assessor, who is a person qualified to determine a person’s mental capacity, may be asked to determine if the person is or is not capable of making decisions about their finances or personal care.
When can you make a Continuing Power of Attorney for Property?
At the time of signing the Continuing Power of Attorney for Property, you, your spouse, or your family member must:
- understand the value of their property;
- understand their obligations to dependants;
- understand the powers being given to the attorney;
- appreciate that the attorney is under an obligation to account for his or her acts;
- understand that the appointment of the attorney can be revoked;
- appreciate that if the attorney fails to manage the property well, it can decline in value; and
- appreciate that the attorney has the power to abuse his or her office.
A valid Continuing Power of Attorney for Property must name the person you have chosen to act on your behalf, must be signed and dated by yourself, and must be signed and dated by two witnesses who saw you sign the document.The witnesses cannot be:
- your spouse, your partner or your child;
- the person you are naming as your attorney, or their spouse or partner;
- anyone under 18 years of age; or
- anyone who is incapable of making their own property or personal care decisions.
Unless it says otherwise, a Continuing Power of Attorney for Property is effective immediately upon being signed and witnessed. However, if you want your Continuing Power of Attorney for Property to take effect only after you have become mentally incapable of managing your finances, then you must make that clear in the document. It is up to you to decide if you want your attorney to be able to help you now or only after becoming mentally incapable.
Prior to a finding of incapacity, your attorney is only acting as your agent. In that role, the attorney is primarily required to carry out your instructions. After a finding of incapacity, then your attorney has a duty to manage your financial affairs, diligently, with honesty and integrity and in good faith for your benefit. The person you name as your attorney has a duty to account to your beneficiaries and to the Public Guardian and Trustee for all transactions made on your behalf.
All things that have a monetary value can be managed by your attorney for property.The assets could be real estate, furniture, bank accounts, stocks, bonds, vehicles, promissory notes or pensions. However, depending on the circumstances, the attorney does not have the right to change or make a beneficiary designation on your insurance policies, your RRSPs or on your RRIFs.
Who can be your attorney?
The only legal requirement when choosing an attorney for property is that the person must be 18 years old or older. However, when choosing an attorney, you should consider if the chosen person is trustworthy and whether they arc good at handling money.
When does it end?
If you have not named more than one attorney or a substitute attorney, your Continuing Power of Attorney ends when:
- your attorney dies, becomes mentally incapable or resigns;
- a court appoints a guardian of property for you;
- you sign a new Continuing Power of Attorney for Property while you are still mentally capable;
- you revoke the power of attorney while you are still mentally capable; or
- you die.
Conversely, under section 12 of the Substitute Decision Act, the duties of your attorney terminate when:
- your attorney dies, becomes mentally incapable or resigns (however your attorney can only resign if you have named an alternative attorney);
- a court appoints a guardian of property for you;
- you sign a new Continuing Power of Attorney;
- you revoke the power of attorney; or
- you die.
The power of attorney is revoked in the same way that it was created — in writing and witnessed by two people. It is not enough to tear up the document.The execution of new Continuing Power of Attorney will also automatically revoke a previous one unless the Continuing Power of Attorney provides that it does not revoke the previous instrument.
Powers of Attorney for Personal Care
Prior to 1992, the common law did not permit substitute decision making once a person became mentally incapable. It is only through the enactment of the Substitute Decision Act that the Power of Attorney for Personal Care came into effect. This has allowed sufferers of Alzheimer’s disease and other diseases to determine their own future in the early stages of their disease. People could indicate their preferences regarding how everyday personal care decisions should be made.
A Power of Attorney for Personal Care is not the same thing as a “living Will.” A “living Will” is a document in which you write down what you want to happen if you become ill and can’t communicate your wishes about treatment. It does not name a specific person to make those treatment decisions on your behalf, nor does a “living Will” have to be signed and witnessed by two people. Often times your “living Will” can be incorporated into your Power of Attorney for Personal Care.
When can you make a Power of Attorney for Personal Care?
Two requirements must be satisfied to make a valid Power of Attorney for Personal Care. The person must be “of age” and that is considered to be 16 years of age and mentally capable. You are considered capable of giving a Power of Attorney for Personal Care if you understand whether your attorney has a genuine concern for your welfare and you appreciate that your attorney may need to make personal care decisions on your behalf.
You can only create a Power of Attorney for Personal Care for yourself. You or a family member cannot prepare a Power of Attorney for Personal Care on behalf of another person regardless of whether that other person is capable or not.
A Power of Attorney for Personal Care authorizes the attorney to make decisions:
- about treatment, admissions to a long-term care facility, or personal assistance services provided within such a facility; or
- about other personal care if the attorney has reasonable grounds to believe that you arc incapable of making the decision. The attorney may also make decisions if the Power of Attorney document does not state any additional procedures that must be followed to confirm incapacity before the attorney may act.
The range of personal care decisions that may be made will depend on your capacity at the time. Personal care is divided into six personal care functions – health care, accommodations, safety, nutrition, hygiene and clothing. Decisions may be required in one or more of these areas.
Your Attorney for Personal Care may follow any advance instructions or wishes that you make with regard to your personal care unless your wishes are impossible to follow or are illegal.
Who can be your Attorney for Personal Care?
The only legal requirement when choosing an Attorney for Personal Care is that the person must be at least 16 years old and cannot be someone you pay to provide you with health care, housing, social, training or support services, unless that person is a relative.
What decisions are covered under the Power of Attorney for Personal Care?
Unless you restrict your attorney’s powers, the Power of Attorney for Personal Care will give full authority to your attorney to make any decision of a personal nature that you would normally make yourself. Decisions about medical treatment, housing, food, hygiene, clothing and safety are all personal care decisions that can be made by your attorney. It is possible for you to name more than one person in your Power of Attorney and divide the decision-making authority among the different attorneys. For example, one person who you name as attorney could be responsible for any health care decisions and another person could be responsible for any housing decisions.
When is it effective?
Unlike the Continuing Power of Attorney for Property, a Power of Attorney for Personal Care can only be used when you are mentally incapable of making your own personal care decisions. As a general rule,it is up to your attorney to decide if you are mentally capable. However, the exception to this general rule is that if a decision is required about your medical treatment or admission into a long-term care facility, then your health care professional must determine if you are incapable of such decisions before your attorney may act. To prevent any abuse, you can include a clause in your Power of Attorney for Personal Care that your attorney is required to get independent evidence of your mental incapacity from your doctor or from a Capacity Assessor before your attorney may act on your behalf.
When can I revoke my Power of Attorney for Personal Care?
You can revoke or cancel a Power of Attorney for Personal Care if you are mentally capable. You are capable of revoking a Power of Attorney for Personal Care if you are capable of giving a Power of Attorney for Personal Care. It is revoked in the same way as it is given. It must be in writing and witnessed by two people.
As noted in the beginning of this article, the time to plan ahead is now, when you are mentally capable of making informed decisions about your assets and your personal care. Consult an estate lawyer to help you plan ahead for the day when you may no longer be mentally capable.
[This article originally appeared in the March/April 2014 issue of Fifty-Five Plus Magazine.]