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POA Weekly: Week 1: What is a Power of Attorney?

This new weekly series brought to you by Bryan Gilmartin of WEL Partners will take a deep dive into the laws concerning Powers of Attorney and explore such topics as common law duties, statutory construction, the standard of care owed by an Attorney, an Attorney’s obligation to account and many more. Enjoy!

Week 1: What is a Power of Attorney?

The Power of Attorney (“POA”) is an instrument that facilitates the maintaining of control over one’s affairs by planning before incapacity.  Being prepared allows the grantor of a POA to require an attorney to take legal steps to protect the grantor’s interests and wishes.  The POA is by no means the only vehicle for the management of an incapable person’s affairs.  More sophisticated estate plans can be considered and there is always the option of guardianship orders for the person and property, either through statutory appointment or court appointment.

The POA conveys authority on the grantee (as agent) by a grantor (as principal) giving the grantee general, and possibly specific, powers to act on the grantor’s behalf.[1]  The giving of a POA is a unilateral act and its validity is not dependent upon acceptance by the attorney for it to be valid.[2]

At common law, the so-called power is not really a power but is merely a manifestation of the authority given by the principal to the agent.

A POA confers authority to act on the agent.  It is not a direction to act.  The agent must pay regard to the subsequent orders of the principal (the grantor) after the POA has been given.

The POA is governed by common law principles, agency law, contract law, the law of fiduciaries, and statutes. In Ontario, there are three types of Powers of Attorney:

  1. A Power of Attorney made in accordance with the Powers of Attorney Act,[3] which sets out the general form of a Power of Attorney;
  2. A Continuing Power of Attorney for Property under the Substitute Decisions Act, 1992[4] (the “SDA”); and
  3. A Power of Attorney for Personal Care under the [5]

[1] As a side-note, it is important to use the correct terminology when distinguishing between a Power of Attorney and an attorney. A Power of Attorney is a document that appoints a person as an attorney and endows that person with certain powers. A Power of Attorney is not a person. Often the public (and even lawyers and judges) will refer to the individual attorney as “the Power of Attorney”. This is incorrect. For more on this topic see Prof. Albert Oosterhoff, “The Power of Attorney and Attorney: Correct Usage,” February 2019, online: http://welpartners.com/blog/2019/02/power-of-attorney-and-attorney-correct-usage/

[2] See G H L Fridman, Agency, Canadian Encyclopedic Digest, 4th Edition, Ontario Vol 2 Title V, updated 2016; Leung Estate v. Leung 2001 CarswellOnt 1972 at para. 7.

[3] Powers of Attorney Act, R.S.O. 1990, c.  P. 20.

[4] Substitute Decisions Act, 1992, S.O. 1992, c. 30, as amended, s. 7.

[5] Ibid at s. 46.

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