This question was considered in the recent decision of Selkirk v. Selkirk, 2022 ONSC 2653 (CanLII).  

In Selkirk, one of the issues considered was whether a transfer of the deceased’s real property on the day before her death to herself and two of her children was valid. The transfer was completed by the deceased’s attorney pursuant to a Power of Attorney for Property. At the time of the transfer, the deceased, again through her attorney, entered into a trust declaration with the transferees of the property wherein the transferees declared that they held the property in trust for the deceased or her estate. 

It was argued that the trust agreement was testamentary in nature, and thus, invalid.  

Under s. 7(2) of the Substitute Decisions Act, an attorney can be authorized to do anything with respect to property on the grantor’s behalf, except make a will.  A will is defined in the Succession Law Reform Act as including a codicil, or any other testamentary disposition. 

The court considered three recent cases on the issue. In one line of cases, a variation of the terms of an existing trust was found to be improper. The revised provisions would only take effect on death, and were therefore testamentary in nature. 

In the other line of cases, transfers of property to trusts were found to be valid. 

The distinguishing factors that saved the transfers seem to be: 

1. The trusts were not dependent upon the death of the grantor. “Where a document creates a trust that takes immediate effect, even though not performed until the death of the settlor, it is not dependant on death for its vigor and effect and is not testamentary”; and 

1. The trusts did not purport to vary the terms of the grantor’s will or estate distribution plan. 

Thus, it appears that an attorney for property can take certain, albeit very limited, estate planning steps on behalf of the grantor of a Power of Attorney. 

(I will leave the question of whether the value of  real property held in trust for an estate attracts Estate Administration Tax for another day.) 

Thanks for reading. 

Paul Trudelle