People often confuse the difference between these two documents. A will is the method by which you decide how your assets on death are distributed subject to some limitations described below. A power of attorney is an instrument that gives another person the power to act on your behalf while you are alive. At its simplest the difference between wills and powers can be explained as a will is effective upon your death, a power of attorney is effective (usually) while you are alive. Powers of Attorney are governed by the Substitute Decisions Act which Governs Powers of Attorney. This Statute was passed in Ontario in 1992. The Substitute Decisions Act establishes two kinds of Powers of Attorney, one being a Power of Attorney over the person thereby enabling the Attorney to make medical and other vital decisions for an incapable person, and the other is a Power of Attorney over property. Under the previous law, if a person became incapable of managing his or her estate and affairs, either by virtue of physical or mental disability or incapacity, there were 3 possible results, namely:
- A court application at considerable cost, to have that person declared incapable and obtaining of a Court Order appointing a representative, called a “Committee” to tend to that person’s affairs.
- If the person being deemed incapable, i.e. mentally ill or otherwise incapable, had signed a continuing Power of Attorney prior to the occurrence of the disability, the named attorney would then have the power and authority to manage and deal with the incompetent person’s affairs.
- If no Power of Attorney was in existence and until an application was brought to a Court to have a Committee appointed for such person, the office of the Ontario Government, namely the Public Trustee would be appointed and manage the incompetent’s affairs. The appointment of a Public Trustee in the former law and now under the present law also being a possibility, is most unsatisfactory, for both immediate family and the person being incompetent. Since the law came into force, a change was made not requiring the government to be asked to make medical decisions such as transfusions and need for operations in absence of the new Power of Attorney for Personal Care. Immediate family members, such as the spouse or children of the person granting the power of attorney may make such decisions.
In addition, the person granting the power of attorney may make “living will” decisions, such as deciding not to be resuscitated in event of no possibility of recovery from life threatening conditions. Now it is legally possible for anyone 16 and over to give a friend or relative power of attorney to make decisions on personal care issues – involving health care, nutrition, shelter, clothing or safety – if the person is unable to take care of these things. With respect to wills, it should be pointed out to Ontario Residents that persons with life insurance, pensions or other plans which designate a beneficiary should generally NOT designate the “Estate” the beneficiary of such RRSP’s, pensions, life insurance policies but rather specific parties. These are exception but these must be carefully discussed with your lawyer.