Often times, when one thinks of the practice of estate law, they understandably focus solely on disputes arising from beneficiaries and estate trustees after an individual has passed. However, a large part of an estates law firm’s practice area is also built up around disputes arising from power of attorney documents. Power of attorney documents operate solely during the lifetime of a grantor, although the conduct of a power of attorney can have massive implications on the estate of the individual who granted them. As such, accepting an appointment to be someone’s power of attorney is not a decision that one should take lightly. A deep understanding of the role, powers, and duties of an attorney is necessary to grasp before one should make the decision of whether or not to commit to such a role. The purpose of this blog post is to give a brief overview as to the basics of the power of attorney role as a jumping off point for anyone potentially considering an appointment.

What is a Power of Attorney?

As a primer, there are two types of power of attorney that we are mostly concerned with: a power of attorney for property and a power of attorney for personal care. While there are several other types of “POAs”, these are the two that arise most often. A power of attorney for property authorizes a named attorney to act on behalf of the grantor in relation to property matters that the grantor could handle if they were capable.[1] A power of attorney for personal care authorizes the named attorney to make decisions concerning the grantor’s personal care on their behalf.[2] These are distinct legal instruments that allow individuals to appoint trusted persons in their lives to make decisions on their behalf. In Ontario, both of these instruments are created by and largely governed by the provisions set out in the Substitute Decisions Act.[3]

In order for a power of attorney for property to be operable, a person need not necessarily be incapable, although this is not the case for power of attorneys for personal care. Powers of attorney are designed to allow a capable person to delegate their authority on an agency basis to manage their own property or personal care to another person.[4] There are a number of reasons why one would wish to delegate their legal authority to make decisions about the management of their property and personal care that do not concern the person’s incapacity. Practically speaking, powers of attorney are most often used in relation to individuals who are incapable of managing their own property and personal care. However, one key requirement of granting a power of attorney is that the grantor absolutely must be capable of granting the power of attorney at the time of its creation. Often times this means that a capable person will grant a power of attorney document while they are capable, in contemplation of that power being exercised at a point in time where they become incapable. When a power of attorney document expresses the intention that the authority given may be exercised during the grantor’s incapacity, it is known as a “Continuing power of attorney”.[5] As such, the fundamental difference between a power of attorney document and a continuing power of attorney document relates to what happens when the grantor becomes mentally incapacitated. A normal power of attorney will cease to operate if and when the grantor becomes incapable, whereas a continuing power of attorney continues to be in operation.[6]

It should be noted that both types of power of attorney documents carry similar duties and obligations toward the grantor, although the scope of one’s duties and obligations in relation to a vulnerable incapable person may be more heavily scrutinized than they would be in relation to a capable individual. Regardless of whether a document is a normal power of attorney or a continuing power of attorney, it is a paramount aspect of our legislation that a grantor must be capable at the time of granting the document. However, capacity is not always clear and can sometimes be difficult to determine.

Capacity

Determining a person’s capacity is a highly individualized examination. It should be noted that a person’s capacity is not static, meaning they could be capable of granting a power of attorney one day, but be incapable the next, and vice versa. As such, challenges to a grantor’s capacity are some of the most common form of legal challenge to a granted power of attorney document. It is also important to note that different levels of capacity are required for different legal instruments. For example, there are different capacity requirements for being capable to manage property and  being capable to grant a power of attorney for property. When granting a power of attorney, it is important to understand that capacity requirements needed to validly execute a given document, otherwise you are opening yourself up to future liability and possible litigation.

Section 8(1) of the Substitute Decisions Act provides the minimum requirements a person must meet in order to be found capable of granting a continuing power of attorney for property. Accordingly, in order to grant a valid continuing power of attorney for property, a grantor must:

1. Know what kind of property he or she has and its approximate value;
2. Be aware of obligation owed to his or her dependants;
3. Know that the attorney will be able to do on their behalf anything in respect of property that the person could do if capable, subject to the conditions and restrictions set out in the power of attorney document;
4. Know that the attorney must account for their dealings with the grantor’s property;
5. Know that he or she may, if capable, revoke the continuing power of attorney;
6. Appreciate that unless the attorney manages the property prudently its value may decline; and
7. Appreciate the possibility that the attorney could misuse the authority given to them.[7]

Section 47(1) of the Substitute Decisions Act lays out the requirements for a person’s capacity to grant a power of attorney for personal care. In order to grant a power of attorney for personal care, all that is required is that the grantor both has the ability to understand whether the proposed attorney has a genuine concern for the grantor’s welfare and appreciates that the grantor may need to have the proposed attorney make decisions for the grantor.[8] Notably, the capacity test for granting a power of attorney for personal care is considerably lower than the test for granting a power of attorney for property.[9]

A continuing power of attorney is specifically designed to survive the grantor’s incapacity. However, often times continuing power of attorney documents are specifically constructed such that they impart no authority to manage a person’s property until they are incapable. When this is specified in the document, a finding of the grantor’s incapacity effectively functions as a condition precedent to the power of attorney, as the document confers no legal powers or obligations until that finding of incapacity is made. If the continuing power of attorney provides that it only comes into effect when the grantor becomes incapable, but does not provide a method for determining whether that situation has arisen, the Substitute Decisions Act provides that the power of attorney will only come into effect when either a formal assessment of the grantor’s capacity has found them to be incapable or a certificate of incapacity is issued under the Mental Health Act.[10][11] Provisions such as this need to be exercised with caution since an individual who has granted a continuing power of attorney may in fact be incapable long before a formal assessment can be completed. During this time, the safeguards that are provided by a power of attorney are inoperable, leaving the grantor in a vulnerable position, as the protective duties and obligations imparted on an attorney are not functioning.

Closing Comments

The protective duties and obligations owed by a power of attorney to a grantor are significant. As such, a cursory review of the fiduciary duties of an attorney will require a posting of its own. For further information on the duties of an attorney, I recommend reviewing WEL Partners on Powers of Attorney, available for free download and pdf on our website.

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[1] Substitute Decisions Act, 1992 | S.O. 1992, c. 30, at s. 7

[2] Ibid at s.46

[3] Ibid

[4] Nguyen-Crawford v. Nguyen, 2010 CarswellOnt 9492

[5] Supra note 1 at s. 7(1)(b)

[6] McGrath v.Effinger et al, 2025 CarswellOnt 18860

[7] Supre note 1 at s.8(1)

[8] Supra note 1 at s.47(1)

[9] Rudin-Brown et al. v. Brown 2021 ONSC 3366 at para 146

[10] Supra note 1 at s.9(3)

[11] Mental Health Act, R.S.O. 1990, c. M.7