(This is an edited version of our Client Guide which provides general information and is made available to our clients to assist them to understand the duties of an attorney under a power of attorney for property. This is not intended to constitute legal advice, which by its nature is situation specific. If you have questions about a specific legal problem, you should consult a lawyer who will provide legal advice only after reviewing all the facts relevant to your situation before providing that advice, rather than relying on the general information provided in this Guide.)

An attorney for property is a fiduciary who must exercise and perform his or her obligations diligently, with honesty, integrity, and in good faith for the benefit of the person who has granted the power. An attorney who acts without compensation shall exercise the degree of care, diligence and skill that a person of ordinary prudence would exercise in the conduct of his or her affairs. If an attorney receives compensation, he or she is held to the standard of care, diligence and skill that a person in the business of managing the property of others is required to exercise. An attorney for property is liable for damages resulting from a breach of the attorney’s duties unless relieved of such liability by a court which is satisfied that the attorney acted honestly, reasonably and diligently. The Substitute Decisions Act imposes the following specific duties on an attorney under a power of attorney for property:

• to explain to the incapable person what the attorney’s powers and duties are;
• to consider the well-being or comfort of the person granting the power in making decisions which will have an impact on the person’s personal comfort or well-being;
• to make property decisions consistent with decisions concerning personal care unless the adverse consequences in terms of property significantly outweigh the decision’s benefits in respect of personal care;
• to keep the required records and accounts (see details on the next page);
• to encourage the person to participate, to the best of his or her abilities, in the attorney’s decisions on his or her behalf;
• to foster regular personal contact between the incapable person and supportive family members and friends of the incapable person;
• to consult with:
  • supportive family members and friends of the incapable person who are in regular contact with the incapable person;
  • the person from whom the incapable person receives personal care;
• to make reasonable efforts to determine whether or not the person has a will and what the provisions of the will are;
• to not dispose of property that is subject to a gift in the will
• to make the following expenditures from the incapable person’s property:
  • those reasonably necessary for his or her support, education and care;
  • those reasonably necessary for the support, education and care of his or her dependants;
  • those necessary to satisfy the incapable person’s other legal obligations;
• in making decisions regarding such expenditures, the attorney shall be guided by the following principles:
  • the value of the property, the accustomed standard of living of the incapable person and his or her dependants and the nature of other legal obligations;
  • expenditures for dependants may only be made if the property is and will be sufficient to provide for expenditures for the incapable person;
  • expenditures for other legal obligations may only be made if the property is and will be sufficient to provide for expenditures for the person and his or her dependants;
• if the attorney makes expenditures for gifts or loans to the person’s friends or relatives or makes charitable gifts, the following principles must be observed:
  • the property must be and must remain sufficient to provide for expenditures for the incapable person;
  • gifts or loans to relatives and friends can only be made if there is reason to believe, based on intentions expressed before the person became incapable, that he or she would make them, if capable;
  • charitable gifts can only be made if the person authorized the gift before becoming incapable, there is evidence that the person made similar expenditures when capable; and that the total value of charitable gifts does not exceed the lesser of 20% of the income of the property in the year in which it was made and the maximum amount or value provided for in a power of attorney made while the grantor was capable;
  • a gift, loan or charitable gift shall not be made if the incapable person expresses a wish to the contrary.

An attorney for property is required by Regulation under the Substitute Decisions Act to maintain the following records and accounts:

• a list of all the incapable person’s assets as of the date of the first transaction by the attorney, including real property, money, securities, investments, motor vehicles and other personal property;
• an ongoing list of assets acquired and disposed of, including date and reason for the acquisition or disposition and person from or to whom it was acquired or disposed;
• an ongoing list of all money received on behalf of the incapable person, including the amount, date, from whom it was received, reason for the payment and the particulars of the account into which it was deposited;
• 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;
• a list of all investments made on behalf of the incapable person, including the amount, date, interest rate and type of investment purchased or redeemed;
• a list of all the person’s liabilities as of the date of the first action by the attorney;
• an ongoing list of liabilities incurred and discharged on behalf of the incapable person, including the date, nature of and reason for the liability incurred or discharged;
• an ongoing list of all compensation taken by the attorney, including the amount, date and method of calculation;
• a list of assets, and value of each, used to calculate the attorney’s care and management fee, if any.

These records must be retained by the attorney until a release is obtained from a person entitled to provide it or court order. If a new attorney is appointed, the records maintained by the prior attorney must be delivered to the new or substitute attorney. On death, the records must be delivered to the estate trustee for the deceased incapable person.

Where a question arises concerning the management of the property of an incapable person, an application may be brought to the court for directions.

   FURTHER QUESTIONS

Any questions? If you have any questions about your responsibilities, please contact us at:

W. Bruce Drake

Hooey · Remus

Telephone: (416) 362-2051

Facsimile: (416) 362-3646

Suite 400, 1 University Avenue

Toronto, Ontario M5J 2P1

 

eMail: bdrake@hooeyremus.com

Website: www.hooeyremus.com

This page was originally created on July 3, 1996 and was last updated on January 1, 2001.

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