Substitute Decision Maker Disputes in Ontario
Pursuant to the Substitute Decisions Act, 1992 a power of attorney for property refers to the power of the substitute decision maker to make financial decisions in the best interests of the grantor. The substitute decision maker may have the power to make decisions related to any of the following: management of the grantor’s income and investments on a day-to-day basis, budgeting, and timely payment of expenses. A power of attorney usually grants the aforesaid powers to the attorney in the event the grantor becomes incapable of making decisions on his own.
When preparing a power of attorney for property, it is important to be careful who is appointed as a substitute decision maker. The actions of an improperly chosen substitute decision maker may give rise to power of attorney litigation.
A common choice is to appoint the eldest child as the attorney. If the wrong person is appointed, this can lead to disastrous results. For example, the attorney may abuse his or her powers in order to dissipate the property of the grantor. In other circumstances, the attorney may simply not have the required skills to manage the property in question.
The attorney should be familiar with working with bank accounts, dealing with accountants and other professionals such as financial advisers and lawyers. It is important to ensure that the attorney has the required record keeping skills. All receipts must be kept and tax returns need to be managed.
Substitute decision makers must be able to cooperate with beneficiaries
It is also important for the substitute decision maker acting as the attorney to be able to get along with any siblings. If the person who is appointed does not get along with the other siblings, he or she may be tempted to do things in secret. This may result in a lawsuit.
Another situation which may give rise to estate litigation is if all the children are appointed as substitute decision makers. If they cannot come to a consensus or if there is no “majority rules” clause in the power of attorney, that means that everyone making a decision has to be unanimous. This often results in delay and stalemates on important decisions.
It is therefore important to be careful when electing an attorney. A practical option may be to appoint a person who is not a member of the family as a co-attorney. Some common options include a financial adviser, accountant, or a lawyer.
You can find more information on selecting and appointing a substitute decision maker by reviewing the Guide to the Substitute Decision Act found on the Ontario Ministry of the Attorney General website here.
The information on this website is not legal advice. It is for informative purposes only. To schedule an appointment, call: 1-866-677-7746. A lawyer can only be retained after a consultation where all the details of the matter and retainer are discussed.