1. The General Rule (Common Law)
At common law, a Power of Attorney (POA) was treated as an agency relationship. As such:
- The attorney’s authority automatically ended upon the death of the donor.
- The attorney could no longer act because the donor (the “principal”) was no longer capable of giving instructions.
Cases:
- Re Westgate (1911), 24 O.L.R. 288 (H.C.J.).
- Fleming v. Noren, [1941] S.C.R. 65 (SCC).
2. Exception: Power Coupled with an Interest
At common law, there was one exception: a “power coupled with an interest.”
- If the attorney held a proprietary interest in the subject matter of the authority (for example, a creditor empowered to sell collateral to satisfy a debt), then the power could continue despite the donor’s death.
- This was a narrow exception. It did not extend to ordinary estate administration or to POAs granted solely for convenience.
Authority:
- Fleming v. Noren, [1941] S.C.R. 65: confirmed that an agency is revoked by death, unless coupled with an interest.
3. Drafting Practices Before 1992
Prior to the Substitute Decisions Act, 1992 (SDA), some lawyers attempted to extend POAs beyond death with clauses such as:
“This Power of Attorney shall not be revoked upon my death, but shall continue in full force and effect until revoked by my personal representative or by a court of competent jurisdiction.”
These clauses were of dubious enforceability unless the POA was truly a “power coupled with an interest.” In practice, courts were reluctant to allow attorneys to act after death unless they had a proprietary stake.
4. The Substitute Decisions Act, 1992 (Ontario)
The SDA codified and clarified the law. It expressly provides that all POAs terminate at death:
- Section 12(2): “A continuing power of attorney for property is terminated when the grantor dies.”
- Section 52(2): “A power of attorney for personal care is terminated when the grantor dies.”
This removes any ambiguity. Even if a POA contains wording suggesting survival after death, such a clause is now legally invalid.
5. Modern Practice
- After death, only the estate trustee (executor), or if none is named, a court-appointed administrator, has legal authority to act on behalf of the deceased’s estate.
- POAs may assist in incapacity planning but have no role after death in Ontario.
Authority:
- Banton v. Banton (1998), 164 D.L.R. (4th) 176 (Ont. Gen. Div.): Justice Cullity confirmed the historical rule and the statutory changes under the SDA.
Summary
- Pre-SDA: POAs ended at death, unless a “power coupled with an interest” applied. Lawyers sometimes drafted survival clauses, and some of these were upheld.
- Post-SDA (1992): The law is clear: all POAs terminate on death.
- Practical takeaway: Estate planning requires both a valid Will and, during life, properly drafted POAs. One cannot replace the other.
Brian Madigan LL.B., Broker
www.OntarioRealEstateSource.com