November is Make a Will month. It is reported that more than 55% of Canadians are without a Will. Still, it is a must-have for anyone with property or assets. While a Will may anchor an estate plan, it is only executed when you pass away. Even more compelling is that while we are alive, we may need someone to act on our behalf if we cannot speak for ourselves. If you lose capacity such as become comatose from a head injury or experience increasingly diminished capacity from a progressive neurogenerative disease such as Alzheimer’s, it is critical that you have Powers of Attorney (POA) in place and that your Attorneys are ready and able to advocate for you and to make decisions on your behalf.

POAs are different from Executors.

In our practice, we often hear people talking about executors and Powers of Attorney as if they are the same role. You may wish to appoint the same trusted family member to both, but the roles and responsibilities are separate and distinct. In stark terms, Attorneys act on your behalf while you are living, but their roles and responsibilities cease when you die. Executors only begin to act when you die and execute your wishes about things like organizing funeral and burial wishes, selling property and businesses, filing final tax returns, and distributing your wealth to beneficiaries.

POA Types – Personal Care and Property

There are two general types of POAs: one that addresses your wishes related to personal care and medical decision-making and one that addresses your wishes related to property, such as financial wealth and managing property.

When discussing estate plans, many people will focus on the POA for Property and what financial decisions must be made, how bills will be paid, how taxes are filed, etc. In our experience, wealth managers and estate planning advisors seem more comfortable discussing POAs for Property and financial decisions. A third party such as a trust company may be appointed if a family member or friend cannot act as a POA for Property.

Choosing an Attorney for Personal Care is equally important

Finding an Attorney for Personal Care can be challenging if a person does not have friends or family members who will act and be prepared to carry out their wishes. Due to the very personal and sensitive nature of the work in making decisions about the care of a person and the necessity of being available for emergencies, most trust companies are not willing to act in this capacity. Some integrated wealth planning companies will act as the POA for Personal Care if they are also the POA for Property and have assets under management. We are also aware of situations where a professional advisor, such as a lawyer or accountant, has agreed to act as the POA for Personal Care.

An effective Attorney for Personal Care needs the time and expertise to be able to act on the grantor’s behalf and according to the grantor’s previously expressed wishes. Regarding decision-making as an attorney, people often express surprise when they learn that the role is far more than what one client described as “when to pull the plug.” The authority for an Attorney in Ontario is found in the Substitute Decisions Act and the Health Care Consent Act. The POA is only used when a person is “incapable of personal care if the person is not able to understand information that is relevant to making a decision concerning his or her own health care, nutrition, shelter, clothing, hygiene or safety, or is not able to appreciate the reasonably foreseeable consequences of a decision or lack of decision.”[1]

Personal care decisions can be complicated and can last for many years. For example, consider the scenario where a niece is appointed her aunt’s Attorney for Personal Care. The aunt was diagnosed with mid-stage Alzheimer’s disease in her mid-80s. She was found incapable of making personal care decisions in all aspects, including shelter and safety. Her aunt lived alone, but the fire department was called twice a month when her aunt set fire to a non-working fireplace. The Attorney was faced with making decisions about whether her aunt could safely live in her home. Does she require in-house caregivers? Should she move to a different setting? What will the annual costs be? And the dominoes of decision-making started to fall. While this example started when the aunt was in her mid-80s, the duties of the Attorney continued for 15 years until the aunt died at 100 years old.

With an aging population, increased longevity, and a growing dementia epidemic where many more Canadians will live with diminished capacity over a more extended period, the need for trusted and effective Attorneys for Personal Care will continue to increase while the availability of people to act seems to be shrinking. From a life planning perspective, an estate plan should be anchored by a Will and well-thought-out POAs for Property and Personal Care. A future blog will explore Personal Care options in more detail.

[1] Substitute Decisions Act. s.45 https://www.ontario.ca/laws/statute/92s30#BK63