Power of Attorney for Property in Ontario Explained

Have you ever considered that life can throw you a curveball, and you are unable to make crucial decisions regarding your property or important financial matters?

Like most people, you may prefer being in control of your investments. Unfortunately, a time may come when you will be forced to let someone else make decisions on your behalf.

However, you can have control over who can make the property-related decisions. That is where the Power of Attorney for Property (POAP) comes in.

A POAP is a legally binding document that hands someone the authority to make financial decisions on your behalf and represent you when you are unavailable. Other reasons you should consider having a POAP are:

• Ensures you appoint someone to manage your finances
• Guarantees your real estate matters continue seamlessly in your absence
• Prevents legal complications leading to prolonged court cases

To safeguard your property investments, this comprehensive guide will explain when you need a POA for property, who can hold the power of attorney, their role and responsibilities, and how to revoke or modify a POAP.

A Power of Attorney for Property, a key part of estate planning, accords authority to a person you name as the grantor to make decisions on your behalf or manage your financial affairs. The person given the responsibility is called an attorney or agent. They are required by Ontario law to act in your best interest.

A POA for property deals with the purchase, sale, and management of your financial property and assets. The following are the powers you can give an attorney in Ontario:

• Handle real estate transactions
• Take care of taxation matters
• Pay any debts or bills you owe
• Apply for any property or financial benefits you qualify for
• Manage the money you have in your bank accounts
• Manage investments such as mutual funds, digital assets, stocks, and bonds

Granting extensive powers to another person carries a risk you can prevent by choosing someone responsible and trustworthy. They must act in good faith and within the powers granted.

A Power of Attorney is a term that includes other legal documents that authorize someone else with various powers. However, key distinctions exist that separate one from the other. The following table highlights these differences.

A POA for property, a crucial legal document in estate planning, becomes necessary when you are incapacitated due to a disability, accident, or illness.

In such a state, you may be unable to manage your financial matters or make decisions. A POA for property enables a trusted person to step in and ensure your financial and property-related matters continue without disruptions.

Another situation you may need to have a POAP could be when you plan to travel outside Ontario and you'll be absent for an extended period. A POAP allows your attorney to sign documents, manage investments, and handle any arising issues.

A POAP also helps you plan for a time you may experience cognitive decline or suffer from dementia or Alzheimer's. These conditions prevent you from making well-calculated decisions. A POA for property ensures your financial interest remains protected and managed properly.

Indeed, a POAP helps you enjoy peace of mind knowing your property is in the hands of a responsible and skillful person. It also enables you to avoid financial mismanagement, delayed decision-making, and unnecessary disruptions.

Ontario provides specific requirements that a person, often a trusted family member or legal professional, must meet to qualify as an attorney.

This individual must:

• Be above eighteen years old
• Understand the task at hand and its consequences
• Be someone you trust and can depend on to act in your best interest
• Be willing to take on the role
• Be impartial when making decisions and not have a conflict of interest

In some situations, you may opt to appoint more than one person to act as an attorney. In Ontario, you can grant them authority to act independently (several authority) or together (joint authority).

Establishing a POA for property, a key step in estate planning, is a straightforward process, but you must first meet these requirements:

• You should be eighteen years old and above and of sound mind
• The POA should be in a physical format
• You must sign the hard copy in the presence of two witnesses
• The two witnesses must also sign it and should not be attorneys or alternate attorneys

Once you meet these requirements, follow the steps below to establish a valid POA for property in Ontario:

1. Choose your attorney or agent after ensuring they meet the criteria we discussed earlier.
2. Decide the powers you want to give the attorney and to what extent. Do you want them to handle taxes and pay bills only, or do you want to include managing bank accounts and selling or buying property?
3. Research and read widely to ensure you follow the relevant laws regarding POAP. For example, ServiceOntario gives a detailed breakdown of POA for property and other POAs.
4. Get the legal forms acceptable by the Ontario government and courts. For instance, Form 13.1 gives your attorney broad property-related powers, while this popular document contains details explaining POA for property and personal care and afterward provides a form to fill.
5. Complete the forms as accurately as possible and provide all the vital information, including your personal information, attorney's information, and extent of authority.
6. Consult with a family member, business partner, or legal professional to confirm you added the correct information and the powers given are reasonable.
7. Contact your witnesses and request them to come and witness your signing. They must also sign the document attesting that you signed without coercion.
8. Distribute the signed copies to your attorney, family members, business partners, and any relevant institution. This step is crucial to ensure people are aware of the appointment.
9. Review and update the POAP as your assets, relationships, and preferences change.

The attorney for property can be a stressful role if handled by a person not informed beforehand of the various duties involved. The following are the roles and responsibilities of the attorney for property:

• Managing financial assets, including real estate properties, investments, and bank accounts.
• Maintain accurate financial records of all transactions and safely store receipts, invoices, and financial statements.
• Ensure timely payment of bills, including mortgages, insurance premiums, utilities, and any other financial obligations.
• Safeguard your assets by overseeing repairs, seeking insurance coverage, and taking steps to prevent financial exploitation or fraud.
• Ensure they meet your tax obligations, including paying taxes, filing returns, and consulting tax professionals to ascertain compliance with tax laws.
• Maintain open and regular communication on the state of your property and finances. They should provide regular financial reports to the relevant parties without fail.

Ensuring the attorney you choose understands these roles will reduce their chances of becoming overwhelmed after taking the role and asking to be released.

Sometimes, people avoid making POAs because they feel they are relinquishing their powers and may lose control of their property. However, with the right guidance and procedures, you can change or cancel your POAP if necessary.

Ontario allows you to revoke or modify the POA for property as long as you meet these conditions:

• You must have the mental capacity to understand the reason for revocation and make decisions about it. If not, a substitute decision-maker of your choice will be involved, or a court will appoint one.
• You must have the intention to revolve or modify the POA for property.
• You must be willing and ready to follow the legal formalities required.

In Ontario, the legal requirement states that the revocation or modification should be done in writing and signed. You must state you are revoking the POAP. The document should be delivered directly to the attorney granted the powers.

Follow these steps once you decide to revoke the current POA for property:

1. Review the existing POA for property
2. Determine why you want to revoke or modify it
3. Prepare a modification or revocation document
4. Sign the document (with a notary public or two witnesses present)
5. Notify all relevant authorities of the changes

Need Help Making Your Power of Attorney for Property?

Making your Power of Attorney for property can be a complex task. It guarantees your financial and property affairs are well managed in your absence or due to unavoidable circumstances.

However, ensuring you follow Ontario laws and the legal formalities can cause you to feel overwhelmed.

Seek a true professional who will ensure you meet all of the requirements and address your unique considerations as you make your POA for property. Contact ClearEstate today for a free consultation.