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POA Weekly – Week 17: What are “Triggering Events”?

There are various ways that powers of attorney come into effect; that is, when the named attorney’s authority to act commences.

The Power Of Attorney For Personal Care becomes effective only when the donor of the power is not capable of making decisions, either generally or specifically.

The Continuing Power of Attorney for Property is effective immediately except that section 7 of the Substitute Decisions Act provides that the document may direct that it comes into effect on a “specified date,” or when a “specified contingency” happens, sometimes referred to as a “triggering event”.

Examples of such contingencies include:

  • The language of the power of attorney provides that the authority only begins when the donor is incapacitated;
  • The language of the power of attorney creates an “Ulysses” contract;[1]
  • On an event which is specified, so that incapacity is deemed to have occurred;
  • On the presentation of doctor’s letters;
  • Where there is a third-party protection clause in the power of attorney; and,
  • When the donor has directed his or her lawyer not to release the power of attorney unless the donor asks for it or the donor, in the opinion of the lawyer, is incapable.

An important consideration is the potential difficulty in using “specified contingencies” in determining the time of activation of the Continuing Power of Attorney for Property. Third party financial institutions, and others will need to rely on the terms of the triggering event in order to permit the attorney to direct the financial affairs of the grantor/donor.  Accordingly, in drafting for specified contingencies, consideration must be given to potential third parties who will need some reliable indicator that the specific contingency of, for example, ‘incapacity’ has in fact occurred, and, that it has continued to occur, and that the grantor/donor has not recovered because of medication or other medical change.

One possibility is to consider the inclusion of the following type of clause in the POA.  Notably, unless one has absolute trust in the appointed attorney, this clause could well be a recipe for disaster:

For the sake of certainty, any document that is an original or notarial certified document signed by [named attorney or some other person] stating that I am not capable of financial decision-making shall be sufficient proof to all persons dealing with [named attorney] of the truth of the statement in the said document, and no third party shall be obliged to make any inquiry into the truth of such statement.

Another possibility, is to instruct the lawyer in writing that the power of attorney for property is to be delivered to the attorney if in the lawyer’s opinion, the donor is unwilling or unable make decisions.

A requirement that there be, for example, two letters from qualified capacity assessors under the Substitute Decisions Act certifying the incapacity of the donor is also a possibility. It is very difficult to have continuous letters obtained from assessors/doctors, unless of course, the letters state that the donor will not recover.

The most efficient or preferable form of Continuing Power of Attorney for Propery, is one which does not contain triggering events.  Rather, the donor and the lawyer have reviewed the trustworthiness of the attorney, the possibility that the power granted to the attorney can be abused, and the likelihood that other family members will be suspicious of the use of the power of attorney.

Similar difficulties occur with the Power Of Attorney for Personal Care. The authority to act arises when the donor is not capable of personal care decisions, and in providing for specified contingencies for illnesses such as schizophrenia, bipolar disorder, obsessive compulsive disorder and clinical depression, these are diseases of the brain that affect a person’s reasoning and some individuals do not recognize that while they are ill, the symptoms of their condition will respond to medication.  Therefore, they do not seek treatment.  If hospitalized, they may be unwilling or unable to comply with treatment plans after discharge.  When this occurs, the individual may require involuntary treatment to protect his or her life and avoid tragic social and personal consequences.  How the lawyer drafts around the need for involuntary treatment is an on-going and complicated issue.

[1] A “Ulysses Clause” is one where the grantor executes a POA for Personal Care waiving their right to apply for a review of the finding of incapacity and may not apply to the CCB for a review of the finding of incapacity. POA’s for personal care containing Ulysses’ clauses are relatively uncommon and are only effective if they comply with specific requirements in the Substitute Decisions Act.

This paper is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This paper is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.

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