Understanding Power of Attorney: Capacity and Limitations

Note this article provides legal information, not legal advice. Reading this article should not be construed as obtaining legal advice from Ross Estate Law.

In legal terms, a power of attorney (POA) is a document that grants one person (the "attorney") the authority to act on behalf of another (the "donor") in managing their financial or personal affairs. The concept of "capacity" plays a crucial role in determining whether someone can legally create a POA.

Here’s a summary of the key provisions relating to capacity and powers of attorney in Nova Scotia:

Presumption of Capacity (Section 2A(1))

Generally, individuals are presumed to be capable of making a power of attorney unless proven otherwise. This means that a person is automatically considered competent to grant this authority unless there are clear reasons to doubt their ability to understand the decision-making process.

Incapacity to Grant a Power of Attorney (Section 2A(2))

A person may be incapable of making a power of attorney if they cannot understand or appreciate certain aspects of the decision. Specifically, the person must be aware of:

• Their property and its value: The individual should understand what property they own and its approximate value.

• Legal obligations to dependents: The person must appreciate their responsibilities toward dependents.

• Scope of the attorney’s powers: The person should recognize that the attorney will have the ability to handle their property and financial affairs, in accordance with the powers granted in the document.

• Risk of misuse: The person needs to understand the potential for the attorney to misuse the granted authority.

• Revocation rights: The person should know that they can revoke the power of attorney while they are still capable but not once they are incapable.

If an individual does not have the capacity to understand and appreciate these points, they will be deemed incapable of granting a power of attorney.

Support for Decision-Making (Section 2A(3))

It’s important to note that a person may still be capable of granting a power of attorney even if they need some support or assistance to understand the relevant information or the potential consequences of their decisions. This means that requiring help in processing information does not automatically imply incapacity.

Rights and Powers of a Capable Adult (Section 2A(4))

Once a capable adult has granted a power of attorney, they retain the ability to perform any actions that they have authorized the attorney to do. Even if the power of attorney document is not currently in effect, the individual can still act independently on matters related to their financial and property affairs.

Attorney’s Authority (Section 2A(5))

An important provision in the power of attorney laws is that, if a person becomes incapable after granting a POA, the attorney may continue to act on their behalf even if the donor objects at the time of the action. The attorney’s authority remains valid unless the donor is still capable and able to revoke or override the attorney's decisions.

Conclusion

Understanding the capacity to create a power of attorney is essential in ensuring that individuals can make informed decisions about who will handle their financial and personal affairs if they are no longer able to do so. The law recognizes that while some people may need help in understanding the implications of granting a power of attorney, this does not automatically mean they lack capacity. Furthermore, even if a person becomes incapable, their attorney can continue to act within the limits of the authority granted.

The legal framework provided by Section 2A protects both the donor and the attorney, ensuring that the donor's wishes are respected while preventing abuse of the power granted.

Please note that the information provided in this blog post is for general informational purposes only and is not intended as legal advice. Reading this post does not create an attorney-client relationship, and the information shared here should not be relied upon as a substitute for professional legal counsel. If you require personalized legal advice regarding estate planning or any related matters, we encourage you to schedule a consultation with Ross Estate Law to discuss your unique circumstances.