megram - Index

megram - 55NovOttawa - Index

Your Finance
By John Johnson, LLB
Most of us in our lifetime will
experience some of the joys
and burdens of looking after
aging parents.The longer your parents
remain independent, the longer these
moments are deferred, but inevitably
your parents will require some assistance
from you to help maintain their
independence or to deal directly with
the medical issues arising in their
care.
Independence is really defined by
a person’s competence to carry out
all of the tasks of daily life without
assistance. This applies equally to
physical competence as well as mental
competence. Incompetence is
often of illness or injury. If a person
becomes incapable of managing property,
no one with an automatic right
(even a spouse) is permitted to take
over the management of the incapable
person’s property.This can create
havoc for the incapable person,
because no one can pay bills, cash
cheques or make other financial decisions
unless authorized by proper
legal documentation.The best way of
dealing with this problem is to plan
ahead by having a lawyer prepare a
continuing power of attorney for
property long before a parent
becomes incapable. If a continuing
power of attorney for property
already exists then the attorney will
be able to manage the property dur-
Challenges
with Solutions
Some ideas for looking after your parents
ing the person’s incapacity and do
anything that that person could do
with his or her property.
In order to sign such a document
a person must have the mental capacity
to do so.An examination of a person’s
mental capacity is governed by
two fundamental components. The
first is an ability to understand the relevant
facts giving rise to need for the
document and the second is an appreciation
of the consequences of the
proposed attorney taking or not taking
specific actions.
In the case of a power of attorney
for property, the Substitute Decisions
Act provides that a person is capable
of giving a continuing power of attorney
for property if he or she:
knows what kind property he or
she has and its approximate value
is aware of obligations owed to his
or her dependents
knows that the attorney will be
able to do on the person’s behalf,
anything in respect of property
that the person could do if capable,
except make a Will, subject to the
conditions and restrictions set out
in the power of attorney
knows that the attorney must
account for his or her dealings with
the person’s property
knows that he or she may, if capable,
revoke the continuing power
of attorney
November/December 2008 • 19 • Fifty-Five Plus Magazine
appreciates that unless the attorney
manages the property prudently
its value may decline
appreciates the possibility that the
attorney could misuse the authority
given to him or her.
If the person executing the
power of attorney lacks the capacity
to meet these criteria then the document
will be invalid.
The simplest way to ensure the
validity of the document is to have it
executed when there is absolutely no
doubt about the person’s capacity. In
this regard it is never too early to
ensure that the proper legal documentation
is in place.
If there is any doubt about the
competence of the person seeking to
grant a power of attorney, then the
next step is to have the person undergo
a capacity assessment by a certified
capacity assessor licensed by the
Government of Ontario. These are
trained professionals, usually having a
background in psychology or social
work, who will perform certain standardized
tests, as well as subjective
questioning, which explores and
examines the limits of a person’s mental
capacity in light of the statutory
criteria set out above.
In the case of elderly parents
there are usually two hurdles that
have to be cleared.The first is to convince
the elder person of the need to