Wills
Power of Attorney and Capacity Litigation
When a person’s mental capacity to make his or her own decisions diminishes, often due to aging, illness, or injury, friends or family members may step in to assist. In some cases, “assistance” can mean different things to different friends and family members resulting in disagreements or even litigation. In other cases, the “assistance” is more blatantly an abuse or misuse of the powers granted to the friend or family member under a power of attorney and this abuse or misuse can result in disputes and litigation. These disputes can be focused on the management of the incapable person’s money or the decisions about his or her personal care, or both.
The Substitute Decisions Act, 1992 is the legislation that governs power of attorney and capacity issues. The law with respect to powers of attorney and capacity is constantly being refined and interpreted through an ever-growing body of case law as the litigation regarding power of attorney and capacity issues increases with a rising percentage of older persons in the Canadian population.
In almost all of these cases, the emotions and dynamics among the parties are highly charged and the stakes are incredibly high as they usually involve the fundamental well-being of a loved one. Our lawyers are known for their sensitive and practical approach to these emotionally charged situations. Combining our legal expertise with great attention to detail and an understanding of what is important to the client, we help our clients build their strongest case while encouraging and assisting them to find creative and practical solutions to resolve disputes. Our lawyers have excellent courtroom skills, but they are also very effective at helping clients achieve resolutions in non-litigious ways, such as through facilitated mediations or negotiations with opposing parties and their lawyers.
Many clients don’t know whether they should proceed with litigation or not, whether it is the best option, or whether they can afford it. If you come in for a consultation with us, we will give you an honest opinion, that is based on your case, circumstances, needs and means. If we think that litigation is not the best option for you and your family, we will not push you in that direction just to get the work out of you. If you do decide to litigate though, we will advocate for you with a high degree of skill, expertise and empathy.
Powers of Attorney and Disability Planning
Powers of attorney are the documents in which you appoint another person or people to manage your property and make your personal care decisions while you are alive. These documents cease to be effective after you die. Making powers of attorney is an important aspect of estate and disability planning. Arguably it is even more important to make powers of attorney than a will, since powers of attorney are the documents that will affect you during your lifetime.
A person who is 18 years of age or older and has the requisite mental capacity can grant a power of attorney for property to another person, people, or trust company to manage his or her property (meaning real estate and other financial assets such as bank accounts and investments). This document usually takes effect immediately upon it being signed. In some cases, the effectiveness of the document will be delayed until the occurrence of a specific event, such as the incapacity of the grantor or the grantor having given written instructions to the attorney to commence acting.
A person who is 16 years of age or older and has the requisite mental capacity can grant a power of attorney for personal care to another person or people to make their personal care decisions (meaning decisions regarding health care, shelter, safety, nutrition, clothing, hygiene). This document only takes effect upon the incapacity of the grantor to make personal care decisions.
The person who makes a power of attorney is called the “grantor”. The person who is appointed to make decisions under a power of attorney is called the “attorney”.
If you do not make powers of attorney, and you become incapable of managing your property (for example, as a result of an accident or illness), there will be no person who is authorized right away to manage the assets you own solely. In the absence of a power of attorney for property, a person would have to apply to the court to be appointed as your guardian of property (which is an expensive process that can take several months to complete) in order to have access to your assets so he or she can manage them on your behalf, for example to pay your bills and access your money to buy things that you need. A common misconception is that spouses of an incapable person or parents of a minor child can automatically access the other spouse’s or child’s assets in order to manage them on his or her behalf – this is not the case. Even a spouse or a parent of a minor child does not have authority to access the other spouse’s or child’s property that they own solely without a power of attorney for property or guardianship of property.
With respect to personal care decisions, some types of personal care decisions can be made by a “priority” person (as determined by legislation) without the presence of a power of attorney for personal care or guardianship of the person. However, not all personal care decisions are privy to this treatment, you may not want the legislated priority person to be your substitute decision maker, or you may want more than one person to be responsible for making your personal care decisions jointly rather than just the priority person alone.
By making powers of attorney you can:
- Choose who you want to appoint to manage your property and choose when this appointment becomes effective
- Choose who you want to appoint to make your personal care decisions in the event that you are incapable of making these decisions yourself
- Choose substitute attorneys in the event that your primary attorneys are not able to act on your behalf because of refusal, resignation, death, mental incapacity or removal by the court
- Appoint multiple people to act jointly as your attorneys
Include “living will” type provisions in your power of attorney for personal care such as specific wishes regarding life-sustaining measures.
Wills and Estate Planning
A will is a document that provides your instructions for the distribution of your assets after your death
and only takes effect after you die.
It is important that you make a will to ensure that whatever assets and personal belongings you have go to the family members, friends, and charities who you want, not what the government dictates. If you die without a will (this is called “intestate”), the laws in Ontario dictate who in your family gets your assets and in what proportions. For example, if you die without a will and leave a spouse and children, your spouse does not get everything. Your spouse will only get the first $200,000 of the value of your estate and the rest will be shared among your children (even if they are minors), subject to other claims a spouse may make under the Family Law Act or dependant’s relief legislation. Also, the administration of your estate will involve a longer and more complicated process than if you had a will – your surviving spouse or heir to your estate will need to hire a lawyer and make an application to the court to be able to administer your estate.
Some of the benefits to having a will are:
- You can choose a person who you trust to be the executor of your will (i.e.,the person who will administer your estate after you die)
- You can choose who you want to be the beneficiaries of your estate and in what proportions and choose alternate beneficiaries in the event that your primary beneficiaries pre-decease you, die in a common accident with you , or die before they receive the full amount of a trust you set up for them in your will
- You can create trusts for children and grandchildren that defer inheritances beyond the age of 18 but provides money for support and educational expenses
- You can provide instructions to your executor as to who gets specific items such as art and jewelry.
- You can provide fairly for a second spouse, common-law spouse, and children from a first marriage
- You can make a tax-deductible gift to your favourite cause or charity
- You can create a trust for a disabled beneficiary who receives ODSP benefits so that receiving an inheritance from your estate does not disentitle them from their ODSP benefits
- You can name guardians for dependants
- You can create primary and secondary wills to deal with assets that are subject to estate administration tax in one will and assets that are not subject to this tax in the other will
- It usually results in your estate being administered after your death much more quickly and inexpensively than if you died without a will
Wills, Powers of Attorney, and Trusts
Our lawyers draft wills, powers of attorney and trusts for people of all ages over the age of 18 with situations that range from the most straightforward to those with complexities such as blended families, disabled beneficiaries, corporate assets, and more.
It is important for all people over the age of 18 with the requisite mental capacity to make a will and powers of attorney. Why is this so important? So long as you have the mental capacity to do so, you should have a say in what happens to your assets, your real property, your savings, your sentimental personal effects, your business you have worked so hard to build. You should be able to state your wishes regarding who takes care of your minor children if something happens to you, who administers your estate, who manages your money and makes your personal care decisions if you become incapable of doing so. And you should be able to express your wishes about where you want to live, and whether you want life-sustaining treatment in certain situations or not.
In addition to all of these reasons, making a will and powers of attorney alleviates a huge burden from your loved ones by removing the guess work for them regarding your wishes and by simplifying the estate administration process during a time when they are already under stress because of your incapacity or grieving because of your death.
If it is so important to make wills and powers of attorney, then why have such a large percentage of Canadian adults not made them? We have heard a variety of reasons for this:
- “I don’t have time to make a will and powers of attorney” – No matter how much time it takes you to gather your information together and come in to see us to do your will and power of attorney planning, it will most certainly take your loved ones much longer to gather all of your information together and make your decisions or administer your estate for you if you have not organized this yourself. You may not have the time to do this work now, but is it fair to leave a mess behind for your loved ones when they will already be dealing with your incapacity or grieving your death?
- “I don’t need to make a will or powers of attorney because I am married. Can’t my spouse make my decisions for me if I am incapable and doesn’t everything just go to my spouse after I die?” – The short answer, to many people’s surprise, is no, not necessarily.
- “I don’t want to spend the money on making a will and powers of attorney with a lawyer” – Trust us, not making a will and powers of attorney is much more expensive than making them. Because we do guardianship applications and estate administration at our firm, we have seen countless families having to spend tens of thousands of dollars, sometimes hundreds of thousands of dollars, in cases where their loved one did not make a will and powers of attorney resulting in costly court applications.
