We tend to think that statutes exist to protect us. Laws are typically enacted by the Legislature as a set of rules governing conduct. But sometime statutes exist to inform risk management. Take Continuing Powers of Attorney for Property as an example. Section 8(1)(f) and (g) of the Substitute Decisions Act reads as follows:

8 (1) A person is capable of giving a continuing power of attorney if he or she…

(f)  appreciates that unless the attorney manages the property prudently its value may decline; and

(g)  appreciates the possibility that the attorney could misuse the authority given to him or her. 

These are lesser known subsections of a section of the SDA addressing what constitutes capacity to make a Power of Attorney for Property. When we think of the requisite elements of capacity, we tend to be more concerned with understanding the purpose of the document. However, assumption of risk must be seen as an essential element of capacity to make a POA for property.

This serves as a useful reminder to estate planners. We are used to telling clients that they should appoint an attorney or property who they trust but it is a more powerful message to remind clients of the adverse consequences of naming the wrong attorney.

Thanks for reading,

David Morgan Smith