Is a Continuing Power of Attorney for Property 100% guaranteed to be accepted?
This is one of the most common questions clients ask when drafting a power of attorney. Unfortunately, the answer is: it depends.
Generally speaking, a power of attorney is required to authorize someone to manage bank assets.Some new immigrants are used to the convenience and speed of large inter-bank transfers in other countries. They assume that in Canada they can also transfer large sums through online banking, or simply provide their passwords to a trustee to operate the account. However, people often overestimate the flexibility can capacity of the Canadian banking system. In most cases, banks do not permit large transfers from personal online banking. Transfers exceeding a certain limit usually require the account holder—or an authorized person—to attend at the bank branch in person. Investment accounts held in an individual’s name also typically cannot be freely managed without contacting the bank’s financial advisor and booking an appointment in advance.
Even with a properly drafted power of attorney granting broad authority over all assets, some banks still insist that the client attend at the branch to sign the bank’s own internal power of attorney form; otherwise, they will refuse to allow the attorney to operate the account. Although this practice may be legally questionable, some individuals have successfully pressured banks—through lawyers and threats of litigation—to change their position. However, not everyone has the time and energy to engage in a legal battle with a bank’s legal department.
In real estate transactions and mortgage financing, real estate brokerages, banks, title insurance companies, opposing lawyers, and the Law Society of Ontario are all very cautious about powers of attorney and often impose additional procedural requirements. A real estate brokerage may first need to review the power of attorney to confirm the attorney’s authority before proceeding with the listing. Once an agreement of purchase and sale is reached, the lawyer handling closing will generally require the client to sign personally unless the client faces health problems or has lost (or is losing) capacity. Lawyers are particularly cautious where the power of attorney was not drafted and witnessed by their own office. In such cases, they usually prefer to verify the client’s identity and intention through remote identity verification and video conferencing. If mortgage financing is involved , some lenders require the borrower to attend in person at the lawyer’s office to sign and refuse remote signing.
In summary, if you need someone to manage your assets while leaving your city for a period of time, or have health concerns, a Continuing Power of Attorney for Property is essential. However, it is not a universal solution. You should always confirm with your lawyer and other institutions in advance.
Disclaimer:
This document is for reference only and does not constitute legal advice. For specific questions, please consult your lawyer.
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