This Blog was written by Suzanna Walter, Estate and Trust Consultant with Scotia Wealth Management
In Ontario, there is a massive backlog of appointments for driving tests due to the shutdown of DriveTest Centres. This led me to quickly check the expiry date of my own Driver’s License, which quickly dispelled my fear of having to prove I can parallel park a car; a skill I have never mastered and avoid trying at all cost. It also got me to thinking about the importance of testing not only the skill of the driver but also the roadworthiness of the vehicle.
With this analogy in mind, when was the last time you reviewed your incapacity plan to make sure that you have the right driver and the right vehicle in place. Not having a plan or having one which is inadequate can be a costly and contentious matter and can lead to family discord.
For most people the cornerstone of financial incapacity planning is completing, a Continuing Power of Attorney for Property (PA for Property) as it is known in Ontario. First a review of terminology: the “Grantor” is the person who signs the PA for Property document authorizing the “Attorney” (the person(s) appointed) to make decisions on behalf of the Grantor.
Here is a checklist for road testing your financial incapacity plan:
Review your PA for Property document
1. Proper Execution: Has your PA for property been properly executed and does it provide that the authority of the Attorneys continues after the Grantor becomes incapable?
a) Multiple Jurisdictions: Is your Ontario PA for Property effective for your financial assets outside of Ontario?
b) Conditions: Is the authority of the Attorney(s) effective immediately or is the authority conditional upon the Grantor being incapable? If conditional on incapacity, be aware that this condition can be both costly and time consuming for the Attorney(s) to satisfy.
c) Location of PA for Property document: Do your Attorneys have access to the original PA for Property document? If your lawyer has all of the original documents, what will your lawyer require to release to your Attorney – an incapacity assessment or opinion from medical doctor?
d) Multiple and Alternative Named Attorneys: If you have named more than one Attorney, do you want them to act jointly or can they act individually? If you have named alternative Attorneys does your PA for Property specify what documentation your alternative Attorneys must show to evidence that the first-choice Attorney cannot act?
e) Guidance to Attorney: Some PA for Property authorize the Attorneys to obtain at the grantor’s expense, legal advice on their responsibilities (such as maintaining complete records and vouchers) and also whether the Attorney should continue regular gifts to charity or family members.
2. Review Carefully your Choice of Attorney: Some attributes you should consider: Trustworthiness, Age and Health, Willingness to act, competency, Impartiality, ability to get along with other family members, and Canadian Residency. A growing area of litigation involves family disputes due to management of financial assets by Attorney(s). Complex assets and family dynamics can make Trust Companies a good option to appoint as Attorney for Property.
3. Important Information: Will your Attorneys be able to find information about your financial assets, know who are your trusted advisors and the location of important documents so that your financial assets can be properly managed. If you are concerned about sharing this information with your appointed Attorney(s), are they the appropriate person to appoint as your Attorney?