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Law 2101 - Mar. 11.docx

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Law 2101

Law 2101 Tuesday March 11 Powers of Attorney, Wills and Estates Law Powers of Attorney • POA = legal document allowing one person to appoint another to act for them • POAs are valid only during the grantor’s life (the person signing the POA) o The grantee is the person who has been appointed Two Kinds of POAs: 1. Continuing Power of Attorney • Allows the “attorney” (not a lawyer, the person appointed) to manage the grantor’s property and make financial decisions on the grantor’s behalf • eg. someone may appoint someone to help them with their banking, pay bills, buy and sell assets (a business, a house) • The attorney steps into your shoes to look after your affairs • Source of Law: Substitute Decisions Act, 1992, S.O. 1992, c. 30, Part 1 (Page PW-2 in your book) • The continuing POA may be in the “prescribed form” (the normal form for a POA, but it is not required) • Effect: o A CPOA authorizes the attorney(s) to do anything that the grantor can do with respect to property • Limitations: o Grantor can put restrictions in the CPOA  They can put limits on their authority (eg. a time constraint for only one year, to be the attorney for the sole purpose of selling their house) o Attorney cannot make a will (it has to be done by yourself personally – you can’t appoint someone to do it for you) o Example Restrictions (you can add these):  The CPOA cannot make any gifts or loans to your relatives or friends  The CPOA cannot make changes to life insurance and RRSP beneficiaries • Requirements to create CPOA: 1) Grantor must be 18+ 2) Attorney(s) must be 18+ 3) Grantor must have capacity • They must have the mental capacity to give power of attorney • A person is capable of giving a CPOA if he or she: o a) knows what kind of property he or she has and its approximate value; o b) is aware of obligations owed to his or her dependents; (eg. children) o c) 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; o d) knows that the attorney must account for his or her dealings with the person’s property; o e) knows that he or she may, if capable, revoke the continuing power of attorney; o f) appreciates that unless the attorney manages the property prudently its value may decline; and o g) appreciates the possibility that the attorney could misuse the authority given to him or her. • It is up to the lawyer to determine whether the person has capacity (to pick up whether there is something wrong) – they may ask to have a note from a doctor • If you don’t have capacity (eg. you have Alzheimer’s), you can’t sign a CPOA, so your family would have to apply to the courts to have a guardian appointed 4) There must be two witnesses to execution 5) No particular form required, but must expressly state that it is a CPOA; OR express intention that authority may be exercised during the grantor’s incapacity to manage property • eg. a woman has Alzheimer’s, but has given POA to her child to look after her banking for her. Because she has Alzheimer’s, a doctor says she has an incapacity to manage her affairs. • A CPOA is valid if at the time of execution, the grantor had the capacity to make a CPOA (even if the grantor is incapable of managing property) • A validly executed CPOA continues to be valid even after the grantor becomes incapable of making a CPOA (it can’t be revoked unless a court does so) o You need capacity to sign a power of attorney and to revoke it • When CPOA comes into effect: o By default, it comes into effect upon signing/execution o A CPOA can also come into effect on a specified date or when a specified contingency happens (when a doctor says you are ‘incapable’ of managing property, if specified) • Termination of a CPOA happens upon: o Grantor’s death o Attorney’s death (if there is no alternate appointed) o Resignation of attorney (if no alternate) o Attorney becomes incapable of managing property o Grantor executing a new CPOA (the old one becomes void) o Grantor revoking CPOA o Court appointing a guardian for the grantor • Assuring that the POA doesn’t abuse their power o You need complete trust in the person appointed o List all of the incapable person’s assets when they took over the estate o Ongoing list of assets acquired and disposed of after appointment o Ongoing list of all mone
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