POWERS OF ATTORNEY FOR PROPERTY REVISITED - PART II
What are the hallmarks of a valid Power of Attorney? Prior to October 3, 1995, the law relating to Powers of Attorney was exclusively governed by the Powers of Attorney Act. Under this act, a Power of Attorney was validly made if witnessed by only one person.
On October 3, 1995, the Substitute Decisions Act came into force. The Substitute Decisions Act requires that two persons witness a Power of Attorney. Note that the following persons are excluded as witnesses:
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The grantee or the grantee’s spouse;
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The grantor’s spouse or partner;
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A child of the grantor or a person whom the grantor has demonstrated a settled intention to treat as his or her child;
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A person whose property is under guardianship or who has a guardian of the person; and
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A person under 18 years of age.
A Power of Attorney that was made prior to October 3, 1995 pursuant to the provisions of the Powers of Attorney Act remains valid and effective and may be used for the transfer of real estate. Powers of Attorney made after October 3, 1995 must comply with the execution requirements set out in the Substitute Decisions Act.
A grantor may revoke a Power of Attorney at any time as long as s/he is capable to do so and as long as the revocation, like the Power of Attorney is in writing and witnessed by two persons.
Third parties who act in reliance and in good faith upon the validity of the Power of Attorney are protected in the event that their actions in reliance upon the document occur prior to any notice being given of the revocation.
The Attorney for Property is not prohibited under the terms of the Substitute Decisions Act from transferring the donor’s property into joint ownership with right of survivorship.
However, the codified statutory duty to act with honesty, integrity and good faith would clearly apply to such a transaction.
Unless the Attorney for Property is the beneficiary of the donor’s estate, funds transferred into joint ownership with the Attorney for Property would almost certainly be impressed with a resulting trust for the benefit of the estate.
Nonetheless, legal title would vest in the Attorney for Property on the death of the grantor. In our experience, the financial institution will have a legal obligation to the joint holder who takes by right of survivorship. The equitable entitlement of the beneficiaries of the donor would require judicial determination.
Have a great day, David
