Law Commission of Ontario proposes new rules relating to POAs

The Law Commission of Ontario has submitted new rules for assessing capacity, regulating guardianship and structuring powers of attorney (POA) to the provincial government.

The 58 recommendations, which stem from two years of study, amount to proposals for a sweeping reform of the way vulnerable people are assisted in areas that range from finances to health care.

If the province adopts the changes, they could help financial advisors with clients who require the assistance of the person appointed to act on their behalf under a POA. (Under Mutual Fund Dealers Association of Canada rules, advisors may not accept POA appointments from clients). This is most likely to be clients who are older, and indeed, the report notes that, “There is particular concern about financial abuse of older persons through POAs.”

Read: The increasing complexities of senior clients with POAs

Several of the proposals are aimed at making the significant powers granted by POAs, which are often poorly understood and implemented, easier to administer. The proposals also suggest that regulators will be seeking to make POAs more transparent — and those who act under these sometimes hard-to-access documents more accountable.

In particular, three core changes have been recommended for POAs. First, when a person agrees to act as a POA, he or she must sign a mandatory, standard “Statement of Commitment” form, which would clearly define their responsibilities under the POA agreement.

A second requirement appears aimed at plugging a gap that can create issues in the use of POAs; specifically, communication to those around the person who granted the POA (the grantor) that it’s now being actively used. That requirement will be delivery of a “Notices of Attorney Acting” when the attorney first begins to act. The document would be delivered to the “grantor, the spouse, any previous attorney and any monitor appointed, as well as for any other persons identified in the POA instrument,” the proposal says.

A third component would be the naming of a separate person, called a monitor, who would have statutory powers to “visit and communicate with the grantor, and to review accounts and records” retained by the attorney, the proposal says.

The proposals contain a wide range of other recommendations for the reform of laws designed to protect the disabled, accompanied by a broad discussion. They include approaches to decision-making when dealing with vulnerable persons that use a “functional and cognitive approach to legal capacity,” paired with a newer style of helping the vulnerable that aims to support their decision-making where possible, with the aim of improving their self-determination. In this regard, the proposal recommends that, “The human rights concept of accommodation be incorporated into approaches to legal capacity.”

The Law Commission also proposes that a new body be created to deal with disputes in this area instead of relying on the costly and lengthy court system. Specifically, it calls for a specialized, expert tribunal with the ability to provide a flexible and holistic approach to resolving disputes. Access to legal aid for this purpose should be strengthened for these types of litigants, the proposals also suggest.

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