Power of Attorney for Property

What is a Power of Attorney for Property?

A Power of Attorney for Property (POA for Property) is a legal document that gives your attorney the authority to manage your financial affairs and property/properties if you become incapable of doing so yourself. The person granting the said power is called the grantor and the individual receiving the authority is called the attorney. The term “attorney,” does not mean the person needs to be a lawyer. You may choose your spouse, a close friend, a family member or anyone else that you trust to be your Power of Attorney. The minimum legal age for an attorney varies according to the province or territory where you live. The person chosen as attorney in the Power of Attorney should be someone who is trustworthy and capable of managing financial matters.

POA for Property covers decisions about property, banking, investments, paying bills, buying or selling property etc. It does not cover personal care decisions, which require a separate POA known as Power of Attorney (POA) for Personal Care.

What are types of Power of Attorney for Property in Ontario?

There are two main types of POAs for Property in Ontario:

1. General Power of Attorney for Property

A General Power of Attorney gives your attorney the authority to act on your behalf for a specific period or purpose. It is often used when you are temporarily unavailable, such as when you are travelling or are out of country.

2. Continuing Power of Attorney for Property

A Continuing Power of Attorney for Property remains valid even if you become mentally incapable of managing your property. It is the most common type used for long-term financial planning, ensuring your attorney doesn’t lose power even if you become mentally incapable so that your property’s decisions and other financial decisions are made as per your wishes stated in the POA.

Revoking a Power of Attorney for Property

The grantor has the right to revoke a POA for Property at any time, as long as they are mentally capable of doing so. To revoke a POA, the grantor must sign a written revocation document and inform the attorney and anyone else who may be relying on the POA (e.g., banks or financial institutions).

What happens if there is no Power of Attorney for Property?

If you become incapable of managing your finances and property and do not have a valid POA for Property, someone, usually a family member, will have to apply to the court for the authority to manage your property. This is known as applying for guardianship of property. The court process can be lengthy and expensive and the court may appoint someone you wouldn’t have chosen yourself.

Common Misconceptions about Power of Attorney for Property

1. A Power of Attorney is not just for the Elderly

Many people believe that POAs are only necessary for the elderly, but accidents or illness can occur at any age. Having a POA for Property ensures your finances are managed properly, no matter your age or health.

2. Power of Attorney does not Grant Unlimited Power

The attorney is legally required to act in the best interests of the grantor. If the attorney mismanages funds or acts inappropriately, they can be held legally accountable.

3. A Will and Power of Attorney are not the same

A will only takes effect after death, while a POA for Property is used while you are alive and loses all its after your death. These two documents are very different from each other and should both be part of your comprehensive estate plan.