Court halts POA sale of testamentary gift

Getting a will can protect your beneficiaries while you’re still alive, as a recent Ontario court case demonstrates. 

Before he was struck down with dementia, the 85-year-old man at the heart of the matter had named his daughter as his power of attorney for both property and personal care. In addition, he executed a will that granted his common-law spouse a life leasehold interest in his home, allowing her to live there “for the rest of her life, or until she chooses to move out.” 

After her father moved into long-term care, the daughter attempted to sell the home in her role as attorney for property. Ontario’s Substitute Decisions Act only allows attorneys to dispose of property that are the subject of a specific testamentary gift if the sale is necessary to comply with their duties, and the daughter claimed she needed the money to fund her father’s care.  

However, the judge hearing the case declined to sanction the sale, expressing doubts about the daughter’s evidence regarding her father’s finances and concern about her obvious dislike for his partner, who still lives in the home. 

“I am not convinced that this does not motivate her decision-making,” the judge concluded.

The ease and speed with which a POA can be drawn up makes them one of the most underrated instruments in the legal world, considering how critical they can become to the grantor’s life. 

Other than making a will, an attorney can do virtually anything the grantor could with their own property, which includes managing everything from the person’s home and its contents to their bank accounts, investments and other financial holdings. 

But as this case shows, an attorney’s power is not unlimited, and courts will step in if they think an appointee has overstepped their authority.  

In my experience with clients, one of the most overlooked issues with POAs is that people don’t realize how much they need one until it’s too late.  

POAs are designed to kick in when a person becomes incapable of handling their own affairs, which means you need to have them in place ahead of time. Once a person reaches the point of incapability, they can no longer sign a valid POA, which can leave family members in a very difficult position. 

The whole process can become quite expensive if the Office of the Public Guardian and Trustee has to become involved, and the court ends up making final decisions. 

Although they don’t get a say over finances, attorneys for personal care also carry heavy responsibilities, making decisions over the person’s health care broadly, including nutrition, shelter, clothing, hygiene, and safety. 

You don’t have to pick the same person to perform both roles, but each POA (personal care and management of property) carries extraordinary power, so whoever you do choose to appoint as your POA should be someone you have absolute faith in.  

Disclaimer: The content on this website is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this website are advised to seek specific legal advice by contacting members of Laredo Law (or  their own legal counsel) regarding any specific legal issues.