This week, I was reminded, once again, of some basic considerations for those trying to help their parents when they can’t help themselves:

1. Make sure your parents have prepared and signed a Continuing Power of Attorney for Property (CPOA);

2. Make sure the witnesses to the CPOA are not prohibited witnesses; and

2. Make sure you document your activity as an Attorney acting under a CPOA.

Don’t have a CPOA?

Without a CPOA, you will need a Guardianship Order to help manage a parent’s income, expenses and assets. It takes three to five months to obtain an Order on the Estates List in Toronto. Who will pay the bills in the meantime? How will your home bills be paid? If your parent doesn’t have a CPOA when one is needed, significant problems arise. It is a very simple and relatively inexpensive process to meet with a lawyer about a CPOA, give instructions and execute a CPOA and yet we continue to see this situation at least once every two months. It is 30 times more expensive to obtain a Guardianship Order!

Witness Requirements?

If your CPOA is not executed property, it is invalid without subsequent court approval. Section 10 of the Substitute Decisions Act is plain:

10. (1) A continuing power of attorney shall be executed in the presence of two witnesses, each of whom shall sign the power of attorney as witness. 1996, c. 2, s. 6 (1).

(2) The following persons shall not be witnesses:

1. The attorney or the attorney’s spouse or partner.
2. The grantor’s spouse or partner.
3. A child of the grantor or a person whom the grantor has demonstrated a settled intention to treat as his or her child.
4. A person whose property is under guardianship or who has a guardian of the person.
5. A person who is less than eighteen years old. 1992, c. 30, s. 10 (2).

(3) Repealed: 1996, c. 2, s. 6 (2).

(4) A continuing power of attorney that does not comply with subsections (1) and (2) is not effective, but the court may, on any person’s application, declare the continuing power of attorney to be effective if the court is satisfied that it is in the interests of the grantor or his or her dependants to do so. 1992, c. 30, s. 10 (4); 1996, c. 2, s. 6 (3).

Despite the prohibition against the above witnesses, we continue to see spouse’s of the grantor and spouse’s of the attorney as witnesses. It is a timely process to obtain an Order validating a CPOA, apart from the expense. Again, it takes at least three months and the expense is 10 to 15 times the cost of obtaining a properly executed CPOA. What if a court didn’t validate the CPOA and the grantor is incapable (i.e. suffering from dementia etc.)? Make sure the CPOA is properly executed. You would think it doesn’t happen, but I was sadly surprised just this week!

Document! Document! Document!

With a properly executed CPOA, the biggest problem I am finding (over and over again) is the attorney’s inability to produce the appropriate documentation to account for their activities on behalf of the grantor (i.e. his or her parent). Section 42 of the Substitute Decisions Act gives the Court the power to order an attorney to account:

42. (1) The court may, on application, order that all or a specified part of the accounts of an attorney or guardian of property be passed. 1992, c. 30, s. 42 (1).

(2) An attorney, the grantor or any of the persons listed in subsection (4) may apply to pass the attorney’s accounts. 1992, c. 30, s. 42 (2).

(3) A guardian of property, the incapable person or any of the persons listed in subsection (4) may apply to pass the accounts of the guardian of property. 1992, c. 30, s. 42 (3).

(4) The following persons may also apply:

1. The grantor’s or incapable person’s guardian of the person or attorney for personal care.
2. A dependant of the grantor or incapable person.
3. The Public Guardian and Trustee.
4. The Children’s Lawyer.
5. A judgment creditor of the grantor or incapable person.
6. Any other person, with leave of the court. 1992, c. 30, s. 42 (4); 1994, c. 27, s. 43 (2).

….

(6) The accounts shall be filed in the court office and the procedure in the passing of the accounts is the same and has the same effect as in the passing of executors’ and administrators’ accounts. 1992, c. 30, s. 42 (6).

(7) In an application for the passing of an attorney’s accounts the court may, on motion or on its own initiative,

(a) direct the Public Guardian and Trustee to bring an application for guardianship of property;
(b) suspend the power of attorney pending the determination of the application;
(c) appoint the Public Guardian and Trustee or another person to act as guardian of property pending the determination of the application;
(d) order an assessment of the grantor of the power of attorney under section 79 to determine his or her capacity; or
(e) order that the power of attorney be terminated. 1992, c. 30, s. 42 (7).

The Court has a number of powers in respect of an accounting. Attorneys are expected to account within a reasonable time; however, without the source documents (i.e. bank statements, receipts etc.), the accounting cannot be prepared, let alone trusted. It takes significant time to collect all of the documents and then reconstruct all of the numerous transactions. Of course, we all think it can be done in a matter of days at little cost, but in reality it takes months and is an avoidable expense. Again, this type of problem kept me busy for a day this week!

So, get a CPOA and ensure your loved ones have a CPOA too, ensure it’s properly executed and keep your documents!