Learn about incapacity planning

You know incapacity planning and powers of attorney are important, but how much do you really know about how they work? This Ontario-based true or false quiz will put your knowledge to the test.

After you’ve taken it, you should have a solid foundation with which to start tackling your own plan with a qualified expert.

Questions

1. An attorney under a power of attorney for personal care has final say with respect to the deceased’s funeral arrangements.

2. If you become incapable of managing your financial affairs, the Public Guardian and Trustee (PGT, or provincial equivalent) automatically takes over your affairs.

3. A continuing power of attorney for property (CPAP) can only be used if the grantor is declared mentally incapable.

4. A CPAP is effective when signed.

5. When used to describe a power of attorney for property, the term “continuing” or “enduring” means the document will continue to be valid even if the grantor moves to another jurisdiction.

6. If you become incapable of managing your financial affairs or making decisions about your personal care and you don’t have a power of attorney, the executor appointed in your will acts on your behalf.

7. Where two or more attorneys are appointed under a CPAP, they must act unanimously.

8. You can appoint the same person as attorney for both property and personal care.

9. You can appoint the same person as your attorney for property and executor.

10. A general unrestricted CPAP lets your attorney make decisions related to your property, including making a new will.

11. A CPAP is only useful if the grantor becomes mentally incompetent or physically disabled.

12. Someone who’s no longer capable of managing her financial affairs may still be able to give a CPAP.

13. A person is capable of revoking a CPAP if he is capable of creating one.

14. A CPAP is terminated if you die.

15. A CPAP is terminated when you execute a new CPAP.

16. An attorney is required to keep accounts of all transactions involving the grantor’s property.

17. A non-resident can’t be appointed as attorney.

18. You can appoint anyone over the age of majority to act as your attorney for personal care.

19. Only the elderly should be concerned about preparing powers of attorney.

20. If you become incapable of managing your financial affairs or making decisions about your personal care and you don’t have a power of attorney, then important decisions about your finances or personal care could go unmade.

Answers

1. False. The responsibility for making funeral arrangements rests with the deceased’s executor.

2. False. Usually, when a person becomes incapable of managing his property, the PGT is never involved. But there are situations that do require a PGT, as outlined in the Substitute Decisions Act in Ontario.

3. False. See #4 for more details.

4. True. Unless otherwise stated in the power of attorney document, a CPAP is effective upon signing.

5. False. It means the document will continue to be valid should the grantor become mentally incapable.

6. False. Having a will doesn’t help in this situation — the executor’s authority only starts at your death.

7. False. In Ontario, and most provinces, you have the option of appointing your attorneys to act “jointly” (i.e. unanimity is required) or “jointly and severally” (the attorneys may act together or separately). Where the document doesn’t specify, the attorneys must act jointly.

8. True. You can appoint the same person to both roles or appoint different people. Trust companies can act as an attorney for property (alone or along with a family member or other person), but can’t act as an attorney for personal care.

9. True. You can appoint the same person to both roles or appoint different people. A trust company may be appointed to both roles (alone or otherwise).

10. False. Attorneys can make most decisions related to your property, but, aside from a limited exception in New Brunswick, an attorney can’t make a new will for you.

11. False. A CPAP can also be useful in situations you find it necessary, or simply convenient, to give someone else the authority to manage your affairs. For instance, it could be useful when travelling, or staying in a hospital.

12. True. Although there’s a minimum capacity threshold to give a CPAP, it’s lower than what’s required for managing financial affairs.

13. True. Unless the power of attorney is irrevocable, a person can revoke the power of attorney if he meets the capacity test for giving a power of attorney. Irrevocable powers of attorney are uncommon and rarely recommended.

14. True. A CPAP is terminated in other circumstances as well, including when the attorney dies or resigns (unless another attorney is authorized to act).

15. True. Unless you state there will be multiple continuing powers of attorney, a CPAP is terminated when you execute a new one.

16. True. The duty to keep accounts is set out in the governing legislation of most provinces such as Ontario’s Substitute Decisions Act.

17. False. You can give a power of attorney to any person who is mentally competent and meets other legal requirements, such as age. You can also give a CPAP to a trust company. However, appointing a non-resident could still be problematic. For example, you may be prohibited from taking instructions from a non-resident attorney.

18. False. Depending on the grantor’s province, certain people may be prohibited from acting as an attorney for personal care. For example, in Ontario, pursuant to subsection 46.(3) of the Substitute Decisions Act, “a person may not act as an attorney under a power of attorney for personal care, unless the person is the grantor’s spouse, partner or relative, if the person (a) provides health care to the grantor for compensation; or (b) provides residential, social, training or support services to the grantor for compensation.

19. False. You might associate the need for these documents with age-related concerns such as Alzheimer’s, but you could face a situation where you’re unable to make financial decisions or personal care at any age.

20. True. An application to court may be required to appoint someone to make these decisions. This process can be costly and time-consuming and you may need a PGT (or other equivalent provincial body).