Why Everyone Should Have a Continuing Power of Attorney for Property: A Personal Injury Context Posted onJanuary 20, 2021February 5, 2021/ Dejan Ristic While the mental incapacity of a plaintiff in the formal personal injury/disbility litigation is adressed via litigation guardian, the need for a guardian may be pressing and independent from any litigation. Having a Continuing Power of Attorney for Property in place is a recommended way to ensure that your property is seamlessly and immediately looked after by your chosen attorney in case of your incapacity, which helps prevent potential losses and financial hardships, while only requiring a small upfront expense. What is the Power of Attorney? The term “Power of Attorney” refers to the legal document by which a “grantor” grants decision-making power to another person (the “attorney”). There are two main types of Power of Attorney in Ontario: 1. A Power of Attorney for Personal Care, which appoints an attorney to make personal care decisions for a person who is unable to do so; and 2. A Power of Attorney for Property, which authorizes an attorney to make property- related decisions. Powers of Attorney for Property are further subdivided into two types: a. A Non-Continuing Power of Attorney for Property, which allows the attorney to make certain decisions in the grantor’s absence. This would be used if, for example, the grantor is out of the country for an extended period of time, or for the period of inconvenience such as temporary immobility caused by injuries or illnesses; and b. A Continuing Power of Attorney for Property, which allows the attorney to make decisions pertaining to the grantor’s property and financial matters if the grantor becomes mentally incapacitated. An attorney under a Continuing Power of Attorney for Property can do anything on your behalf other than to make your last will, with the scope and onset of the attorney’s powers solely left up to the grantor’s discretion if chosen so. Who can be a Grantor? Section 8 of the Substitute Decisions Act (Ontario), SO 1992, c30, (SDA) provides that: 8 (1) A person is capable of giving a continuing power of attorney if he or she, (a) knows what kind of property he or she has and its approximate value; (b) is aware of obligations owed to his or her dependants; (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; (d) knows that the attorney must account for his or her dealings with the person’s property; (e) knows that he or she may, if capable, revoke the continuing power of attorney; (f) appreciates that unless the attorney manages the property prudently its value may decline; and (g) appreciates the possibility that the attorney could misuse the authority given to him or her. (2) A person is capable of revoking a continuing power of attorney if he or she is capable of giving one. Notably, s. 9 (1) SDA provides that a person may be incapable of managing the person’s own property and yet be capable of giving a Continuing Power of Attorney. As such, Ontario jurisprudence provides for an additional capacity test, and S. 8 may not be typically considered as an absolute necessary one. Plaintiff’s Personal Injury & Disability Outside of Litigation Situations that result in personal injury or disability may lead to litigation. The litigation guardian for a mentally incapable plaintiff may commence or continue action on behalf of the plaintiff without the court appointment, subject to filing an affidavit with the court. However, the plaintiff’s litigation guardian has no powers outside of litigation and cannot look after the plaintiff’s other property affairs, which could be possibly much more significant and pressing than the litigation per se. For any property matter unrelated to the subject litigation, and absent a Continuing Power of Attorney for Property, the guardian must be appointed for the plaintiff, either by the court, or through the Public Guardian and Trustee, which is the ultimate statutory guardian. This means that the proceeding must be commenced, and either procedure may be protracted and costly due to needs for legal representation and costs for the expert’s evidence by duly qualified assessors and medical experts. On top of these expenses, a delay of guardianship for property may negatively affect the plaintiff’s assets. For example, it might prevent acquisitions, liquidations, financing or significantly delay proper execution and pursuit of insurance coverage or applications for disability benefits. The aforementioned issues may leave the plaintiff and his/her dependents in a difficult and undesirable financial position especially during a challenging time of injury or illness where they are experiencing a loss of income or wages. What could have been accomplished with the modest expense of having a Continuing Power of Attorney for Property properly prepared in advance, a sudden and last minute need for one turns into unnecessary legal expenses, delay in the payment of insurance coverage or disability benefits, and financial losses for the plaintiff. Establishing a Continuing Power of Attorney for Property The grantor should choose a trusted person, who is aware of the grantor’s property intentions, to act as the grantor’s attorney. There are certain formal legal requirements for drafting and witnessing a Continuing Power of Attorney for Property which must be met in order for the documents to be valid. The Ministry of the Attorney General has very detailed information, including a kit here regarding how to have a Continuing Power of Attorney for Property properly executed and prepared. Notwithstanding its apparent simplicity, the Continuing Power of Attorney for Property may require legal advice before its execution as it may have far reaching consequences on the grantor’s property. For example, the grantor may need advice regarding its onset, safe keeping, use, and potential multiplicity of attorneys, related decision making rules and/or attorney’s substitution(s), to name a few. If the grantor’s personal and family milieu is contentious, the legal advice is recommended. If the Continuing Power of Attorney for Property is being prepared after the injury or onset of disability which brings the grantor’s capacity in question, then legal advice is highly recommended. The capacity to grant the Power of Attorney is a legal test, and as the fluctuating capacity is endorsed by the courts, legal assessment and opinion would be a must to make the Attorney properly and soundly established, and ultimately operational and valid if later challenged for any reason. If you have any questions about Powers of Attorney, please contact Dejan Ristic, a lawyer at Devry Smith Frank LLP at 416-446-5812, or at dejan.ristic@devrylaw.ca. Home and hospital visits, and video conferencing are available as necessary. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” Authors Dejan Ristic 416-446-5812 416-446-5812 dejan.ristic@devrylaw.ca Related Posts Posted onMay 19, 2021May 19, 2021/ Marc Spivak Be Prepared for In-Person Medical Examinations – Personal Injury: Mierzejewski v Brook, 2021 ONSC 2295 During the COVID-19 pandemic, many in the legal profession began transitioning their practice online with the widespread use of Zoom for hearings, trials, examinations for discovery, etc. However, the courts may require plaintiffs to attend in-person medical examinations in personal injury cases despite public health concerns. In Mierzejewski, the defendant brought a motion seeking an [...] Read more Posted onJune 22, 2020September 29, 2020/ Marc Spivak What to Expect from your Personal Injury Case during COVID-19 This pandemic has affected every aspect of our daily lives in profound ways. However, our firm is still operating as usual albeit remotely, as legal services were deemed an essential service by the province. From a procedural standpoint, there have been a number of changes due to the closure of courts. Suspension of Limitation Periods [...] Read more Posted onJune 12, 2020September 29, 2020/ Marc Spivak An Open Email dated June 12, 2020, from Personal Injury Lawyer, Marc Spivak, to our Attorney General Regarding Suspending Juries in Civil Law Cases To the Honorable Doug Downey Attorney General of Ontario I am a personal injury lawyer and have been for 28 years. The first 9 years of my practice I acted for insurance companies on the defence of insurance matters. I can tell you firsthand the almost complete unfairness of the archaic jury system that we [...] Read more Posted onJune 5, 2020September 29, 2020/ Marc Spivak Supreme Court of Canada Shuts Down Insurer Leave to appeal from the Court of Appeal’s decision in Tomec v Economical Mutual Insurance Company In 2019 ONCA 882 was recently denied by our highest court. This finally shuts down years of refusals by Economical trying to prevent another car accident victim from receiving benefits that ought to have been paid. Ms. Tomec’s 2008 car accident [...] Read more Posted onFebruary 21, 2020July 5, 2023/ Marc Spivak What Effect Will My Social Media Presence Have on My Personal Injury Claim? A large percentage of the world’s population now uses social media – whether we are sharing, tweeting or simply just spectating, this fast-growing phenomenon is becoming increasingly popular and in some cases has proven to dominate the way in which people communicate. With that being said, social media is now being used by more insurance [...] Read more