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Holidays and POAs: 4 things to consider when gift-giving on behalf of a person with dementia

Every year Carolyn would give some cash to her grandkids for the holidays. It wasn’t a huge amount, maybe $20 per child accompanied by a card. But this year, Carolyn’s dementia has progressed to the point that she no longer manages her own money. Her daughter, Lucy, is in charge now.

Lucy is conflicted. She thinks mom would want the grandkids to receive their usual gifts. But she isn’t sure if this is allowed.

Lucy is not alone. It’s holiday time and questions often arise about whether gifts can be given on behalf of a person who, legally, isn’t capable of managing property.

There are at least 4 factors Lucy will have to consider:

1.       Is there enough money?

Under Ontario’s Substitute Decisions Act, the gifts can only be made if there is enough money to meet Carolyn’s needs. Lucy will have to consider Carolyn’s expenses, whether she has dependents she financially supports, and whether she has other legal obligations. If money is tight, it may be unlawful to give holiday gifts on Carolyn’s behalf. Carolyn’s needs must come first.

2.       What would Carolyn want?

Under the Substitute Decisions Act, the gifts can only be made if there is reason to believe, based on what Carolyn expressed when she was mentally capable, that she would make the same decision now if capable. If there is a long history of giving $20 to the grandkids during the holidays, it’s probably safe to assume this is what she would want.

3.       What does the Power of Attorney for Property say?

Most Powers of Attorney for Property say nothing about gifts. But what does Carolyn’s say? If she wrote that the gifts should continue, that’s great to know because it provides clear direction (subject to #1 above). But what if she feels it is kind of patronizing to give gifts because they’re not really from her? In the event she expressed this in her Power of Attorney, her wish should be respected.

4.       What does Carolyn say today?

Even people who have lost capacity to manage their property can be asked what they want in certain situations. If they don’t understand the question and/or are not able to communicate at all, that’s one thing. But many people who are legally incapable of managing property can understand certain information and express preferences.  The Substitute Decisions Act tells us that a gift to a relative (or friend or charity, for that matter) shall not be made if the incapable person expresses a wish to the contrary. If Carolyn says that she doesn’t want to make those gifts, that is a very important consideration.

What if there is no Power of Attorney for Property?

Finally, if there is no Power of Attorney for Property Lucy may be unable to do anything. Without a Power of Attorney, Lucy may not have legal authority to touch mom’s money, in which case it may be necessary to become her guardian of property. And because the guardianship process is lengthy, it will not be concluded this holiday season. In that case, Lucy may wish to reach into her own pocket so mom can “gift” some money to the grandkids.

If you are an attorney for property and want to better understand your duties, or you’re interested in learning about guardianship, give us a call. We’ll help you honour your loved one’s wishes, while abiding by the law.

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