Power of Attorney for Property in Ontario: What Your Attorney Can and Cannot Do

A will handles what happens after you die. A continuing power of attorney for property handles the much more likely scenario: you are alive, and you cannot manage your own money.

In Ontario, the document is governed by the Substitute Decisions Act, 1992. It is a separate document from a power of attorney for personal care, and it is separate again from your will. People routinely believe one covers the others. None of them do.

What the document actually is

A continuing power of attorney for property authorises a person you name (the attorney, who does not have to be a lawyer) to do anything with your property that you could do yourself, other than make a will.

The word continuing is what matters. A plain power of attorney ends if you become mentally incapable, which is precisely when you need it. A continuing power of attorney expressly states that it continues, or that it takes effect on incapacity.

Two structural choices are made when the document is drafted:

• When it takes effect. Immediately on signing, or only on a finding of incapacity. Immediate effect is simpler to use and requires more trust
• Who acts. One attorney, two acting jointly (both must agree on everything), or jointly and severally (either can act alone). Joint appointment of two siblings who disagree is a common and avoidable source of paralysis

The tax side, which is where it gets practical

Here is the part that surprises families: a valid Ontario power of attorney is not, by itself, enough to deal with the CRA.

The CRA maintains its own representative authorization system. To act on a taxpayer’s account, the attorney must be recorded as an authorized representative, either through the taxpayer’s CRA account online or by submitting the legal document establishing the authority. Form AUT-01 covers offline access by phone, mail and fax.

The practical consequence: authorise the representative while the person still has capacity. Once capacity is lost, the process shifts to submitting and having the CRA review the legal documentation, which takes materially longer at exactly the moment somebody is trying to get a return filed.

Do the same at every financial institution. Banks and brokerages apply their own internal review to a power of attorney and will not simply accept a photocopy over the counter.

What the attorney must do

The accounting duty is the one that ends up in litigation. An adult child who managed a parent’s finances for six years with no records, in complete good faith, can find themselves unable to prove where the money went when a sibling asks. Keep a simple ledger and the bank statements. It costs an hour a month and it is the only real protection the attorney has.

What the attorney cannot do

• Make or change a will. Absolutely not, in any circumstance
• Change a beneficiary designation on an RRSP, RRIF, TFSA or insurance policy. Doing so effectively rewrites the estate plan, and it is outside the authority
• Make gifts or loans beyond what the legislation permits. There are narrow allowances for modest gifts and charitable giving consistent with a pattern the grantor established, but an attorney who starts moving money to family members is in dangerous territory
• Act after the grantor dies. The authority ends at death. From that moment the estate trustee takes over, and the CRA must be notified of the date of death. The handover is described in executor duties in Ontario

That last point is worth stating twice, because attorneys frequently keep paying bills from a parent’s account for weeks after a death. The authority is gone, and the payments are being made without legal standing.

Tax planning by an attorney: the honest position

An attorney can do routine tax work: file returns, pay instalments, manage investments prudently, make RRIF withdrawals, pay tax owing.

What an attorney should be very careful about is anything that changes who eventually receives the property. Selling a cottage triggers a gain and converts a specific bequest into cash. Collapsing a portfolio changes the deemed disposition position on death. Transferring an asset into joint names with a child is not a neutral administrative act, it changes ownership, may trigger tax, and creates the beneficial ownership questions described in bare trusts and T3 reporting.

None of that is forbidden, and some of it may genuinely be in the grantor’s interests. But it should be documented with reasons at the time, and where the amounts are significant, it should be done with advice rather than on instinct.

The joint account shortcut, and why it is not one

The most common alternative to a power of attorney is adding an adult child to a bank account “so they can help”.

It works for day to day banking, and it creates four problems: the account is exposed to the child’s creditors and marriage breakdown, the arrangement raises a question about who beneficially owns the funds, the surviving child may be presumed to take the balance to the exclusion of siblings, and it does nothing at all for the house, the investments, or the CRA.

A power of attorney is the tool designed for the job. The joint account is a workaround that solves ten percent of the problem and creates a different one.

Digital access is now a real gap

Increasingly, the assets an attorney has to manage are not at a branch. Online banking, brokerage logins, a crypto wallet, an email account that receives every statement, a domain name renewing on autopay.

A power of attorney gives legal authority. It does not give a password, and sharing credentials often breaches the platform’s terms of service. That gap is covered in digital assets in an estate, and it applies just as much during incapacity as after death.

A short checklist

1. Have a continuing power of attorney for property, drafted for Ontario, and a separate power of attorney for personal care
2. Name a substitute attorney in case the first cannot act
3. Register the attorney with the CRA as an authorized representative now, not later
4. Do the same at each bank and brokerage, and confirm each institution has accepted the document
5. Tell the attorney where the documents are, who the accountant is, and what accounts exist
6. Review the appointment every few years, and after any family change

None of this is expensive. All of it becomes impossible the day capacity is lost, which is the point of the exercise.

If you are acting as attorney for a parent and are not sure what you can do with their investments or their tax filings, it is worth an hour to map the boundaries. The duties are strict, and the people most likely to be criticised later are the ones who took the job seriously and kept no records.