Continuing powers of attorney are potentially useful, inexpensive legal documents to guard against a situation where a person becomes incapable of managing his or her property.

In the event that a person becomes incapable, unless the incapable person had executed a continuing power of attorney for property document, the only way going forward to administer the incapable person’s property is by the appointment of a statutory guardian of property for the incapable person.

A guardianship appointment is both lengthy and expensive.

In order for a continuing power of attorney for property to be valid the person making the continuing power of attorney for property needs to be legally capable of executing the power of attorney document.

In order for a person to be capable of executing the power of attorney for property the person needs to;

1. Understands the kind of property he or she has and its approximate value;
2. Is aware of obligations owed to his or her dependents;
3. Knows that the attorney will be able to do on the person’s behalf anything in respect of property that the person could do if capable, except make a will, subject to the conditions and restrictions set out in the power of attorney;
4. Knows that the attorney must account for his or her dealings with the person’s property;
5. Knows that he or she may, if capable, revoke the continuing power of attorney;
6. Appreciates that unless the attorney manages the property prudently its value may decline; and
7. Appreciates the possibility that the attorney could misuse the authority given to him or her

If there are any concerns surrounding the capacity of a person who is considering making a continuing power of attorney, it is important that the person obtain a capacity report from his or her family doctor, or that the person undergo a capacity assessment under the Substitute Decisions Act.

Barrie Hayes, Partner