Capacity to make a power of attorney for property is a legal test similar to the one required to make a valid Will although generally considered to be somewhat less onerous. Many jurisdictions in Canada set out the test for capacity to make a power of attorney for property in their provincial legislation and it may vary between provinces. Generally it requires that you know the nature of your assets and liabilities as well as your financial obligations to others. You must also understand that your attorneys can do essentially everything you could do with respect to your property except make a Will or other testamentary disposition as well as the fact that the attorneys you appoint could misuse their authority or cause a loss in the value of your property if they do not act prudently.

If you do not have the required legal capacity at the relevant time, your power of attorney for property will not be valid. Lawyers are trained to determine whether the legal test for capacity has been met and required to do so as part of their duties. However, in difficult cases it may also be necessary to have a capacity assessment done from the medical perspective as well to be completed by an approved assessor.

Capacity to make a power of attorney for personal care is a legal test that is considered less onerous than the ones for making a Will or power of attorney for property. Many jurisdictions in Canada set out the test for capacity to make a power of attorney for personal care in their provincial legislation and it may vary between provinces. Generally it requires the grantor to understand whether the proposed decision maker has a genuine concern for the grantor’s welfare; and appreciates that the proposed decision maker may have to make decisions for the grantor (with respect to personal care matters).

If you do not have the required legal capacity at the relevant time, your power of attorney for personal care will not be valid. Lawyers are trained to determine whether the legal test for capacity has been met and are required to do so as party of their duties. However, in difficult cases it may also be necessary to have a capacity assessment done from the medial perspective by an appoved assessor.

It should be noted that a person can be found to be incapable of managing finances or care but still have capacity to grant the respective power of attorney or even make a Will. This is becasue the capacity required for making decisions is different from the level of capacity required to grant powers of attorney or make a Will.