Acting Under a Power of Attorney

Transcription

1 Knowledge ~ Compassion ~ Peace of Mind Acting Under a Power of Attorney Two Kinds of Powers of Attorney There are two kinds of Powers of Attorney documents: Power of Attorney for Property; Power of Attorney for Personal Care. Please see our brochure entitled Information About Powers of Attorney for general information about Powers of Attorney. This brochure discusses the duties and responsibilities of an attorney under a Power of Attorney for Property but not under a Power of Attorney for Personal Care. Scope of Authority as an Attorney An attorney can do anything relating to property and financial affairs that the grantor could do if she or he were capable, except make or change a Will. Limitations on an Attorney An attorney does not have the authority to stop the grantor from dealing with his or her own property. If this became necessary, someone would have to make an application to Court to be appointed guardian of property. Generally, an attorney may not dispose of property which is specifically mentioned in the grantor s Will except in very limited circumstances. For example, such disposition might become necessary to ensure there were enough funds to pay for the housing and care of the grantor. There may be specific limits on the attorney s authority which are spelled out in the Power of Attorney for Property. The attorney s discretion to spend money on behalf of the Grantor is generally limited to the following: support, education and care of the grantor; support, education and care necessary for the grantor s dependants; debts and taxes of the grantor. Unless the Power of Attorney says otherwise the attorney may not delegate (give) his or her authority to another person. Can I Give Gifts or Make Loans on Behalf of the Grantor? Provided there is enough money or assets to pay the above expenses, the attorney can make charitable gifts on behalf of the grantor if such gifts are mentioned in the Power of Attorney or if there is evidence that similar gifts were being made while the grantor was capable. For example, prior year income tax returns may show that the grantor made regular donations to certain charities. However, the gifts cannot total more than 20% of the annual income from the grantor s property. The attorney can only make gifts and loans to people if the grantor, when he or she was mentally capable, had expressed an intention to make the gift or loan. What are my Duties? The attorney must consider the personal welfare of the grantor and must communicate with the person who is the attorney for personal care. In the case of a conflict between the two, precedence will likely be 1869 Maple Grove Road, Ottawa, ON K2S 1B9 Tel: (613) Fax: (613)

2 given to the Power of Attorney for Personal Care. The best interests of the grantor must always be given top priority. The attorney must exercise a standard of care when acting on behalf of the grantor. If acting without being paid, the attorney is held to a standard of care, skill and diligence with which a typically prudent person would manage their own affairs. If being compensated (paid), the attorney is held to the standard of a person in the business of managing other s person s affairs (solicitor or trust company). The attorney must make reasonable efforts to determine whether the grantor has a Will and what the Will says. The attorney must consult with the grantor s family and others close to him or her. The attorney has a duty to cooperate with supportive family members and friends without divulging any financial information. The attorney must try to explain matters to the grantor and encourage their participation in decisionmaking and considering the mental capacity of the grantor. If the attorney has taken over the grantor s affairs due to a decline in his or her health, the attorney must consider whether the grantor will be able to return to, or continue to live in, his or her home or if it is likely that he or she will permanently move to a nursing home, a retirement residence or live with a family member. If there is any reasonable possibility that the grantor may recover sufficiently to return to his or her home, the attorney must not make any irreversible decisions quickly particularly if there is no financial expediency for doing so. If someone else is the attorney of personal care (or the guardian of the person), the attorney must also consult with this person when making financial decisions that affect the grantor s personal care, such as where the grantor will live. Immediately upon taking over the grantor s financial affairs, it is recommended that the grantor s mail be re-directed to the attorney, either by completing the appropriate form through the post office or by contacting each of the grantor s creditors, banks, and so forth to notify them of the change of address. The attorney will be asked to provide each institution with a notarial copy of the Continuing Power of Attorney for Property to prove he or she is the appointed attorney. The attorney should immediately review the grantor s papers to determine if there are any outstanding bills. The attorney will need to attend at the grantor s bank to prove he or she is the appointed attorney by providing the bank with a notarial copy of the Continuing Power of Attorney for Property or allowing the bank to photocopy the original and return it immediately. Unless the attorney is known to the bank staff, he or she will be asked to provide identification. Once a signature card has been signed by the attorney at the grantor s bank, the attorney can then make the necessary arrangements to pay any outstanding bills. The attorney is responsible for filing the income tax returns of the grantor as well as payment of any income taxes, penalties and interest that may be owing. Filing deadlines are the same regardless of who is doing the filing. The attorney may seek the advice of a tax accountant to assist with any outstanding income tax returns and to ensure that quarterly income tax installments are made on time, if any. Note that when filing the grantor s tax returns with Canada Revenue Agency (CRA), the attorney will need to include a notarial copy of the Continuing Power of Attorney for Property. Although the attorney may allow financial institutions and others to see a copy of the original Continuing Power of Attorney for Property document, the original document must never be given to anyone. It is recommended that the attorney have several notarial copies prepared which can then be given to institutions that request it, such as banks, CRA, the post office, and others as needed. An attorney can be held to account if they fail to carry out their duties according to law. Accounting Records The attorney must keep an accounting (copies of receipts, cheques, deposits, bills paid, etc.) of all transactions made on behalf of the grantor while acting under the Power of Attorney for Property. Please see our brochure entitled Estate Accounting for Estate Trustees and Attorneys for further information on keeping accounting records. Can I be Compensated for Acting as an Attorney? Unless otherwise stated in the Power of Attorney, an attorney is permitted to take compensation for work completed on behalf of the grantor. The usual amount claimed is 3% of capital and revenue receipts and income disbursements annually. In addition, an attorney can be paid a Care and Management fee of 3/5 of 1% of the average annual value of the assets being managed. Please see our brochure entitled

3 Estate Accounting for Estate Trustees and Attorneys for further information on compensation. Termination of Authority A Power of Attorney is terminated or cancelled by any of the following: the grantor dies; the attorney dies or becomes mentally incapable; the grantor becomes bankrupt; the attorney renounces by giving notice to the co-attorney or substitute attorney, the Office of the Public Guardian and Trustee and the various institutions where the attorney conducted business on behalf of the grantor; the grantor signs a new Power of attorney; the grantor revokes or cancels in writing; the end of a certain time period as stated in the Power of Attorney, if any. Copyright , Donna S.M. Neff Reproduction of this brochure is only permitted with written authorization by the author. If you have questions or if you would like more information, please call us at This brochure is not intended to be legal advice but contains general information. Please consult a lawyer or other professional to determine how the information in this brochure might apply to you. R:\Files2\Publicity - NLOPC\Brochures\Brochures - Current\WordVersions\Acting under a power of attorney.doc Version: For more information, click here to be redirected to the Service Ontario e-laws website to view "Accounts and Records of Attorneys and Guardians (O. Reg. 100/96)"

4 Accounts and Records of Attorneys and Guardians (O. Reg. 100/96) APPLICATION 1. This Regulation applies to attorneys under continuing powers of attorney, statutory guardians of property, courtappointed guardians of property, attorneys under powers of attorney for personal care and guardians of the person. FORM OF ACCOUNTS AND RECORDS 2. (1) The accounts maintained by an attorney under a continuing power of attorney and a guardian of property shall include, (a) a list of all the incapable person s assets as of the date of the first transaction by the attorney or guardian on the incapable person s behalf, including real property, money, securities, investments, motor vehicles and other personal property; (b) an ongoing list of assets acquired and disposed of on behalf of the incapable person, including the date of and reason for the acquisition or disposition and from or to whom the asset is acquired or disposed; (c) an ongoing list of all money received on behalf of the incapable person, including the amount, date, from whom it was received, the reason for the payment and the particulars of the account into which it was deposited; (d) an ongoing list of all money paid out on behalf of the incapable person, including the amount, date, purpose of the payment and to whom it was paid; (e) an ongoing list of all investments made on behalf of the incapable person, including the amount, date, interest rate, and type of investment purchased or redeemed; (f) a list of all the incapable person s liabilities as of the date of the first transaction by the attorney or guardian on the incapable person s behalf; (g) an ongoing list of liabilities incurred and discharged on behalf of the incapable person, including the date, nature of and reason for the liability being incurred or discharged; (h) an ongoing list of all compensation taken by the attorney or guardian, if any, including the amount, date and method of calculation; (i) a list of the assets, and value of each, used to calculate the attorney s or guardian s care and management fee, if any. (2) An attorney under a continuing power of attorney and a guardian of property shall also keep, together with the accounts described in subsection (1), a copy of the continuing power of attorney, certificate of statutory guardianship or court order constituting the authority of the attorney or guardian, a copy of the management plan, if any, and a copy of any court orders relating to the attorney s or guardians authority or to the management of the incapable person s property. 3. (1) The records maintained by an attorney under power of attorney for personal care and a guardian of the person shall include, (a) a list of all the decisions regarding health care, safety and shelter made on behalf of the incapable person, including the nature of each decision, the reason for it and the date; (b) a copy of medical reports or other documents, if any, relating to each decision; (c) the names of any person consulted, including the incapable person, in respect of each decision and the date; (d) a description of the incapable person s wishes, if any, relevant to each decision, that he or she expressed when capable and the manner in which they were expressed; (e) a description of the incapable person s current wishes, if ascertainable and if they are relevant to the decision; (f) for each decision taken, the attorney s or guardian s opinion on each of the factors listed in clause 66(4)(c) of the Act. (2) An attorney under a power of attorney for personal care and a guardian of the person shall also keep a copy of the power of attorney for personal care or court order appointing the attorney or guardian, a copy of the guardianship plan, if any, and a copy of any court orders relating to the attorney s or guardian s authority or the incapable person s care. CONFIDENTIALITY AND DISCLOSURE OF ACCOUNTS AND RECORDS 4. An attorney or guardian shall not disclose any information contained in the accounts and records except, (a) as required by section 5 or permitted by section 6; (b) as required by a court order;

5 (c) (d) as required otherwise under the Act or any other Act; or as is consistent with or related to his or her duties as attorney or guardian. 5. (1) An attorney under a continuing power of attorney shall give a copy of the accounts and records he or she keeps in accordance with section 2 to any of the following persons who requests it: 2. The incapable person s attorney for personal care or guardian of the person. (2) A guardian of property shall give a copy of the accounts and records he or she keeps in accordance with section 2 to any of the following persons who requests it: 2. The incapable person s attorney for personal care or guardian of the person. 3. If the Public Guardian and Trustee is the guardian of property, the incapable person s spouse, except a spouse from whom the incapable person is living separate and apart within the meaning of the Divorce Act (Canada), or the incapable person s partner, child, parent, brother or sister. 4. The Public Guardian and trustee, if he or she is not the incapable person s guardian of property or guardian of the person. (3) An attorney for personal care shall give a copy of the records he or she keeps in accordance with section 3 to any of the following persons who requests it: 2. The incapable person s attorney under a continuing power of attorney or guardian of property. (4) A guardian of the person shall give a copy of the records he or she keeps in accordance with section 3 to any of the following persons who requests it: 2. The incapable person s attorney under a continuing power of attorney or guardian of property. 3. The Public Guardian and Trustee, if he or she is not the incapable person s guardian of property or of the person. RETENTION OF ACCOUNTS AND RECORDS 6. (1) Every attorney or guardian shall retain the accounts and records required by this Regulation until he or she ceases to have authority and one of the following occurs: 1. The attorney or guardian obtains a release of liability from a person who has the authority to give the release. 2. Another person has acquired the authority to manage the incapable person s property or make decisions concerning the incapable person s personal care, as the case may be, and the attorney or guardian delivers the accounts or records to that person. 3. The incapable person has died and the attorney or guardian delivers the accounts or records to the incapable person s personal representative. 4. The attorney or guardian is discharged by the court on a passing of accounts under section 42 of the Act and either the time for appealing the decision relating to the discharge has expired with no appeal being taken or an appeal from the decision relating to the discharge is finally disposed of and the attorney or guardian is discharged on the appeal. 5. A court order is obtained directing the attorney or guardian to destroy or otherwise dispose of the accounts or records. (2) Subsection (1) applies, with necessary modifications, to former attorneys and guardians. 7. This regulation comes into force on the day Part ΙΙΙ of the Advocacy, Consent and Substitute Decisions Statute Law Amendment Act, 1996 comes into force.