Area of Law: Wills, Estates and Powers of Attorney
Answer # 159
What if you do not have a Power of Attorney for Property?Region: Ontario Answer # 159
A Power of Attorney for Property is a written document that allows someone else to make decisions about your property and finances. Many people incorrectly believe that if they are unable to make decisions about their property or financial matters, their immediate family can do it for them. Unlike personal or health care decisions, the law does not permit family members to have automatic rights over the management of a mentally or physically incapable person.
For any financial decisions, legal authority is needed. If you become unable to make decisions about your property or finances and you do not have a Power of Attorney for Property, someone must apply to a court for permission to be your representative or a guardian will be appointed by either the Ontario government’s Office of the Public Guardian and Trustee, or by the court. There are generally four circumstances where a guardian for property could be appointed.
1. A guardian may be appointed if you are in hospital and temporarily incapable
A Guardian of Property may be appointed if you become hospitalized because of an illness or an accident. For example, if you are in a car accident and you become unconscious, someone will need to look after your property and financial affairs while you are in the hospital.
First, you need to be formally declared as being mentally incapable of handling your affairs. This can usually be done by a psychiatrist in the hospital where you are. But, if the hospital does not have a psychiatrist, then a request must be made for a “capacity assessor” to do the formal assessment.
Once an assessment finds that you are mentally incompetent, a Certificate of Incapacity will be issued. The Public Guardian and Trustee will then become your guardian first. This is called a “statutory guardianship”. As the guardian, they will first seek out any family member who can replace them as your guardian. Provided there are no disagreements among family members as to who should be the replacement guardian, the Public Guardian and Trustee will hand over guardianship immediately. That person will then have guardianship while you are mentally incompetent.
2. A guardian may be appointed with your consent
Second, a Guardian of Property may be appointed if you are not hospitalized, but someone thinks you are incapable of handling your property and financial affairs. For example, an adult child may believe that their aging parent is forgetting to pay the monthly bills.
First, a mental assessment of the person must be done. This mental assessment cannot be done unless the person consents to the assessment. Unless there is a court order, no one can force the person to undergo an assessment. If the person agrees, and the assessment results indicate that the person is mentally incompetent, the person’s consent is still needed before a guardian can be appointed.
If the person consents to having a Guardian of Property, then the Public Guardian and Trustee will become the guardian first. The person’s family can then apply to the Public Guardian and Trustee to replace them as the incapable person’s guardian. Provided that the family agrees on who should be the guardian, the Public Guardian and Trustee will hand over guardianship immediately to that person.
3. A guardian may be appointed without your consent by a court order
If the person does not agree to a mental assessment, or does not consent to having a guardian, then the only other option is to make an application to the court. An application for guardianship can only be made by people 18 years of age or older. People who are paid to provide health care, residential, social, training, or support services to an incapable person generally cannot apply, unless they are also the person’s spouse, partner, relative, guardian, or Attorney for Property or Personal Care. The court will decide whether the person is mentally incapable, and will name a guardian if necessary. In certain circumstances, a trust company may be a good choice for a Guardian of Property. Applying to court can be very expensive and complicated. You should consult with a lawyer first before making an application.
4. A guardian may be appointed if you are in a psychiatric hospital
Fourth, a guardian may be appointed for a person who is a patient in a psychiatric hospital. Once they are found to be mentally incompetent, the Public Guardian and Trustee will become the guardian first. Any family member can then apply to replace them as the legal guardian.
More information about Wills and Powers of Attorney can be found from the Ministry of the Attorney General. Wills and Powers of Attorney are extremely important documents and relatively inexpensive to have prepared professionally. Drafting a Power of Attorney involves a number of technical legal details. If it is not prepared correctly, it will not be legal. When drafting a Power of Attorney, applying to become a guardian, or if someone is applying to be your guardian and you do not agree, you should consult a lawyer.
Get help from a life insurance advisor
Understanding life insurance and what is best for you can be overwhelming. It is important to get professional advice for your unique situation, and it is more affordable than you think. Life insurance can protect your family, your home and your business. For a free consultation and quote, contact an Empire Life Insurance advisor.
You now haveoptions: