Recently, several clients have asked us: “I am my mother/father/aunt/uncle’s attorney for property. He/she is having problems remembering things, or has become sick. When do I start acting?”
While this seems like a simple question, it is not always clear, and can sometimes be difficult for an appointed attorney to determine.
In Ontario, it depends. Continuing powers of attorney may be effective immediately upon execution, or at a certain date or upon the happening of a trigger event defined by the grantor in the document, or when incapacity strikes.
Where there is no trigger event required in the document, the attorney can act as the grantor’s agent on the grantor’s instructions immediately; and he or she can begin making decisions regarding the grantor’s property as a fiduciary when he or she has reasonable grounds to believe the grantor is incapable of managing property.
It can become much more complicated where a trigger event is involved. Time must be spent during the planning stage to think about the practical applications of the type of trigger and to draft carefully without leaving room for confusion. If incapacity is the trigger, how is it to be determined? How do you deal with the need for consent prior to a capacity assessment? How do you deal with the increasing policy decision of the family doctor to “not get involved”? How do you deal with changes in circumstances? All of this emphasizes the importance of educating our clients and being creative in planning.
Lesson Learned: The time to deal with these questions is now, rather than when the grantor is losing capacity. With proper planning (not partial planning) potential confusion and headaches can be avoided.