Don’t let inheritance issues tear your family apart


Written on March 7, 2016 – 5:45 am | by Elaine Blades

I was recently drawn to the Life section of the Toronto Star –  more specifically the “advice column” – by a compellling headline; to wit: “Don’t let inheritance issues tear your family apart”.  So far, sound advice.

However, the author went on to provide some inaccurate information on Powers of Attorney to the “upset granddaughter” who’s concerned about another family member’s “dwindling the inheritance for myself and other relatives”.   Although the readership of the advice column and this blog don’t necessarily align, I nonetheless felt compelled to address a few of the “not exactly true” statements from the column.  For example:

“…urge your parents to ask a lawyer about when they should consider, along with your grandmother’s other children, when to apply for power of attorney (POA) over her finances”.  A POA is not something one applies for.  Instead, a POA is written legal authority given by one person (the grantor or donor), to another person or trust company (the attorney), to act on the grantor’s behalf.  There are two basic types of POA:  for the management of property and for personal care.  In the event an individual becomes incapable of managing their financial affairs or of making decisions about their personal care, and they do not have POAs in place, it is possible for someone to apply to court to become their “guardian of property” and/or “guardian of the person”.

“No one relative can be gifted without the approval of the person(s) with the POA”.  This is not correct.  Subject to limited exceptions, the grandmother is free to deal with her assets, including making gifts, even if a POA is in place.  She doesn’t need anyone’s approval to do so.  There are however restrictions in respect of the attorney’s ability to make gifts.  Subsection 37.(3) and (4) of Ontario’s Substitute Decisions Act, authorize the making of gifts or loans to the person’s friends and relatives and also charitable gifts, subject to certain guiding principles.

One final example, “her Will, presumably drawn when she was mentally sound, cannot be changed once she’s found to be deteriorated enough to legally require POA oversight”.  Although the gist of this remark may be “kind of” true, the statement conflates and misrepresents a few legal concepts.  The statement “legally require POA oversight” would be better phrased as “incapable of managing property”.  However, just because one is incapable of managing their property, it does not necessarily mean they lack capacity to make or alter their Will.  In fact, it does not necessarily mean they lack capacity to make a POA.  There is no one uniform “capacity test”; the thresholds and tests in respect of various activities (making a POA, making a Will, getting married!) are all different. Moreover, unless otherwise stated, a continuing POA for property is effective when signed, not only if the grantor becomes “deteriorated enough to legally require POA oversight” (a phrase which is meaningless to anyone working in this area).

Bottom line: seek independent professional legal advice in respect of any issues or questions related to estate and incapacity planning and/or administration and/or litigation.  Not everything you read on the internet happens to be true.

On an unrelated note…just a reminder that tomorrow is International Women’s Day; a “global day celebrating the social, economic, cultural and political achievement of women”.  To learn more visit:  International Women’s Day.

Thanks for reading.

 

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