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Powers of attorney: Your capacity, care, and continuity

When it comes to estate planning, most people are familiar with Wills, which are used to distribute property after death. But it’s equally important to address lifetime decision-making, should your mental capacity be diminished by an accident, illness, or age-related decline. This complements your Will by taking care of yourself first before you take care of others.
The naming of substitute decision-makers has been a recommended part of estate planning for decades, though rules vary somewhat among provinces. In this article, we’ll outline common principles and planning considerations, using the traditional term “power of attorney” (POA) which is still used in many provinces.
We encourage you to consult an estate planning lawyer in your province to learn the appropriate terminology, and to discuss how the principles in this article apply in your situation.

Legal effect

Powers of attorney allow you to share decision-making power over your property and/or personal affairs with someone else. It is important to note that by doing so, you do not lose your own ability to make those decisions. As the giver of the power, you are known as the grantor, donor, or principal.

The person to whom you grant the power is called your attorney. Though that term can be a synonym for lawyer (mostly in American law), in this usage it simply means decision-maker. Other terms include representative, proxy, designate, or agent. Whatever the official term, understand that you are giving that person significant legal powers, so your decision to grant a POA and your choice of attorney must be carefully thought through.

A brief history

The law of power of attorney has been around for centuries, with its origins in the judge-made common law. Those early POAs dealt exclusively with property (and related financial matters), and historically would cease to be effective if the person granting the power became mentally incapable of making such decisions.

Provincial legislation now supersedes most common law rules, including the option for an attorney to continue to act after a grantor’s incapacity, in which case it is known as a continuing, enduring, or durable power of attorney.

These modern POAs still deal with property decisions, and may also extend to authority over the individual personally. Written authority is required, with some provinces allowing a single document for both purposes, and others requiring a separate document for each role, even if the same attorney is named for both purposes. For distinction in this article, we’ll call these the POA-Property and POA-Personal.

Capacity to execute the document

For POA-Property, the grantor must generally be at least age of majority, which is 18 or 19 according to the province. As well, the grantor must know the extent and approximate value of their property, any legal or moral obligations to dependents, the nature of the power that is being granted, and the potential for its misuse or abuse.
For POA-Personal, some provinces allow the grantor to be as young as 16. Generally, the grantor must understand the kind of decisions covered, which may include medical consent, general health care, nutrition, shelter, clothing, hygiene, and safety. In addition, some provinces require an acknowledgement that the grantor believes that the named attorney has a genuine concern for the individual’s personal care.

Coming into force

Each province has rules on the format, content, and witnessing requirements for the execution of POAs.
It is possible to require that a POA-Property only takes effect once the grantor is incapacitated, but that would require a mental assessment of some sort, which could delay its use when time may be critical. Alternatively, a common practice is to have it effective on execution, with the stated intention on its face that it is expected to be used on a later incapacity. The document should remain in safekeeping, possibly in the lawyer’s office vault, which provides a degree of protection against its premature use.
A POA-Personal attorney will normally only act when the grantor is incapable, or otherwise unable to respond.

Scope of authority

A POA-Property attorney can generally do anything that the grantor can do, with the exception of making a Will or doing things that would alter testamentary/estate distributions. For example, the attorney can’t change the beneficiary of an RRSP, though some provinces allow continuation of a past designation to a new RRSP or RRIF.
A grantor may place restrictions on an attorney’s powers if desired, such as narrowing from all property to some specific property or stating a time limit. Instructions may also be given to an attorney, though this is most often in general terms. Absent that, an attorney’s first responsibility is to take care of the interests of the grantor, then any dependents, and possibly provide gifts, loans, or donations, so long as it reflects the grantor’s habitual practice.
For a POA-Personal attorney, there may be a separate “living will” or advance care directive stating the grantor’s wishes about medical treatment. This may not be legally binding (depending on province), but the attorney must consider any wishes expressed by the grantor while capable, whether in a POA, oral or in writing elsewhere.

Legal duties on incapacity

Acting as an attorney is a big responsibility, especially once a grantor becomes incapacitated. At all times, but especially at this point, an attorney must act diligently and in good faith. The attorney must explain decisions to the grantor and involve the grantor in making those decisions to the extent possible. As well, the attorney should consult with family, friends, and caregivers as appropriate, and assist the grantor in maintaining contact with them.
For a POA-Personal attorney, there is a particular requirement to help the grantor live as independently as the person may wish. And when treatment or intervention is needed, it should be the least restrictive course of action.

Who to name as attorney, and how

An attorney must be mentally capable, and generally at least age of majority, though some provinces allow a younger age for a POA-Personal attorney. An attending health care worker or someone providing paid personal care services cannot usually be a POA-Personal attorney, unless it is a family member.
The same person could be attorney under both POAs, as is common with spouses, or separate attorneys could be named for each POA role. There could be a primary attorney, with an alternate if that first-named person cannot serve or continue in the role. Two or more people may be concurrent attorneys for either POA, though it can get logistically and emotionally challenging the more who are involved. If it is intended that multiple attorneys be able to act independently of one another, the POA document must state this as “joint-and-several.” Otherwise, every decision, instruction, and permission, for example signing a cheque, must involve all attorneys “jointly.”
In evaluating candidates, a grantor should think about the length and depth of their relationship, as the attorney will be making intimate decisions as if in the grantor’s shoes. Knowledge and capability with financial matters are important, as well as practically whether they can devote the time and are physically near enough to do the job. And don’t forget organizational and communication skills, diplomacy, confidentiality, and general trustworthiness — all of which might be soft skills in other situations, but are at the core of what is needed in this sensitive role.

For more information, please consult your financial advisor and tax professional.


Mutual funds are offered through Credential Asset Management Inc. and Qtrade Asset Management (a tradename of Credential Asset Management Inc). Mutual funds and other securities are offered through Qtrade Advisor and Credential Securities, a division of Credential Qtrade Securities Inc. Credential Securities is a registered mark owned by Aviso Wealth Inc.
Aviso Wealth Inc. ('Aviso') is a wholly owned subsidiary of Aviso Wealth LP, which in turn is owned 50% by Desjardins Financial Holding Inc. and 50% by a limited partnership owned by the five Provincial Credit Union Centrals and The CUMIS Group Limited. The following entities are subsidiaries of Aviso: Credential Qtrade Securities Inc. (including Credential Securities, Qtrade Direct Investing, Qtrade Advisor, VirtualWealth and Aviso Correspondent Partners), Credential Asset Management Inc., Credential Insurance Services Inc., Credential Financial Strategies Inc., and Northwest & Ethical Investments L.P.
The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax or similar matters. This document is published by CQSI and CAM and unless indicated otherwise, all views expressed in this document are those of CQSI and CAM. The views expressed herein are subject to change without notice as markets change over time.

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