Who gets to make decisions when a person can no longer make them alone? In Ontario, the answer usually comes down to two very different mechanisms under the Substitute Decisions Act, 1992 (the “SDA”): a power of attorney (“POA”) and guardianship. Although both appoint a substitute decision maker, the distinction between them is largely one of timing and choice. One is planned in advance by a capable person, while the other is imposed by the court after capacity is already lost.
Two Documents, Two Domains
The SDA, together with the Health Care Consent Act, governs decisions about both property (personal and real property) and personal care (health, housing, nutrition, and safety). These are treated as separate legal problems, each with its own document and its own capacity test.
A Continuing Power of Attorney for Property (“CPOAP”) authorizes an attorney to manage the grantor’s banking, investments, real property, and other financial matters, and it continues to operate through any period of incapacity. A Power of Attorney for Personal Care (“POAPC”) authorizes an attorney to make decisions about health, hygiene, nutrition, shelter, clothing, and safety. The capacity requirements for each are set out in sections 8(1) and 47(1) of the SDA respectively.
When Should Someone Execute a Power of Attorney?
The short answer is: while they still have capacity, and ideally well before it is ever in question. A power of attorney is a proactive, private planning tool. It is signed by a mentally capable adult (the “grantor”) who chooses in advance whom they trust to act on their behalf.
The principal advantages of planning ahead include the following:
- The grantor chooses. The individual selects their own attorney, rather than leaving that choice to a court or to the Office of the Public Guardian and Trustee (“PGT”). For most people, having valid powers of attorney in place means no guardian will ever need to be appointed.
- Flexibility. A power of attorney can be tailored, limited in scope, or made subject to conditions or a triggering event, such as a finding of incapacity.
- No court involvement and lower cost. A power of attorney is a private document that does not require court approval, so it avoids the delay, expense, and public record that a guardianship application entails.
- Continuity. A CPOAP remains effective once the grantor becomes incapable, which is precisely when it is needed most. A word of caution: an ordinary, non-continuing power of attorney for property ends the moment the grantor becomes incapable, so care must be taken to use the continuing form for incapacity planning.
In practical terms, if a person still understands the relevant information and can appreciate the consequences of a decision, a power of attorney is the appropriate route, and guardianship is unnecessary.
When Should Someone Apply for Guardianship?
Guardianship is the reactive counterpart. It is a court process that appoints a substitute decision maker for a person who is already incapable and who has no valid power of attorney covering the decisions that need to be made. Under the SDA there are two categories: guardian of property and guardian of the person.
A guardianship application generally becomes necessary in circumstances such as these:
- No valid power of attorney exists. Where a person becomes incapable of managing property and never signed a valid CPOAP, someone may need to apply to the Superior Court of Justice to be appointed guardian of property. The same holds for personal care.
- The existing attorney cannot or should not continue. Guardianship may also be pursued where the named attorney is unwilling or unable to act, or where the power of attorney itself, or the attorney’s conduct, is being challenged.
Importantly, a guardian of property may only be appointed where the court makes a finding of incapacity, and section 22(3) of the SDA directs that a guardian should not be appointed if there is a less restrictive course of action that does not require a finding of incapacity and that better preserves the person’s decision-making rights. Guardianship is, in this sense, a remedy of last resort.
A Power of Attorney Is Not Always the Last Word
It is worth remembering that executing a power of attorney does not entirely foreclose court intervention. Where a proposed attorney is unsuitable, the existence of a power of attorney will not be determinative. In Gefen v. Gefen et al., 2022 ONSC 6259, the Court declined to appoint the incapable person’s son as guardian of property despite an existing power of attorney, citing significant family conflict and prior adverse findings, and instead appointed a neutral third party. When determining who should be making decisions for an incapable individual, the guiding principle is that the best interests of the incapable person are paramount.
The Less Restrictive Alternative in Action: D.R. v. A.R.
The recent decision in D.R. v. A.R., 2026 ONSC 796 offers a valuable illustration of how the court applies the less restrictive alternative principle in section 22(3) of the SDA, and of why a power of attorney can remain the answer even where capacity is genuinely in doubt.
The respondent, Ms. A.R., was the 86-year-old matriarch of a wealthy family who inherited her late husband’s substantial estate, including shares worth tens of millions of dollars. Following her husband’s death, concerns emerged about her cognitive functioning: she made large unexplained cash withdrawals, and, the day before her husband’s death, signed corporate documents she later acknowledged she did not understand. Her attorneys for property, acting under a continuing power of attorney she had executed in 2014, applied for an order declaring her incapable of managing property and appointing a guardian of property.
Ms. A.R. opposed the application. She acknowledged that she needed assistance but maintained that she retained capacity to instruct counsel and to grant or revoke a power of attorney. Three capacity assessments were before the court, addressing her capacity to manage property, to instruct counsel, and to grant and revoke a power of attorney. The assessments confirmed mild cognitive impairment but supported her capacity to appoint an attorney for property.
Justice Dietrich dismissed the application. Guided by section 22(3), the Court held that a guardian was not required because a less restrictive alternative existed: Ms. A.R.’s own ability to execute a new power of attorney. Notably, the Court reached this result not because it was satisfied she had capacity to manage her property in any robust sense, but because her retained ability to grant a power of attorney, with assistance, provided a path that respected her autonomy to the fullest extent possible. The decision reaffirms that capacity is decision-specific: a person may need help managing property while still being capable of choosing who should provide that help.
For practitioners, D.R. v. A.R. is a clear reminder that the court will strive to preserve an individual’s right to self-determination. Before pursuing guardianship, counsel should carefully consider whether the individual retains the capacity to grant a power of attorney, since that avenue may displace the need for a court-appointed guardian altogether.
Key Takeaways
- Chosen versus imposed. A power of attorney is chosen privately by a capable person in advance. Guardianship is imposed by the court after capacity is lost. That single distinction explains almost every practical difference between the two.
- Plan early. Executing a CPOAP and a POAPC while capable is the simplest, most cost-effective way to ensure a trusted person, rather than the court or the PGT, steps in when needed.
- Guardianship is a last resort. It should be pursued only where no valid power of attorney exists or where an existing attorney cannot or should not act, and only where no less restrictive alternative is available.
- Capacity is decision-specific. As D.R. v. A.R. confirms, a person may be capable of one type of decision, such as granting a power of attorney, while needing assistance with another, so the applicable statutory test should always be considered.
The takeaway for clients is straightforward. Careful incapacity planning today, through properly drafted powers of attorney, is almost always preferable to a guardianship application tomorrow.
Thank you for reading.
By, Filbert Yung