It is my advice that everyone over the age of 18 must have powers of attorney in place both for Property and Personal Care. If you have not yet made your Will with me, or if you have not updated it within the past five years, please make an appointment to see me. We will take care of both the Will and Powers of Attorney, which left undone can cause many headaches and much stress down the road.
If you are named Power of Attorney for someone else, here are some things you should know:
Who Can Be Named? Anyone 18 years of age and older can serve as an attorney for property, solely, jointly or severally. Some people choose to name joint attorneys in the event that one dies, resigns or becomes incompetent to act.
Roles: Powers of Attorney, generally speaking, handle financial duties for those incapable of managing their own financial tasks. As someone's power of attorney, you would be responsible for such duties as day-to-day banking, shopping, home maintenance, etc. This does not mean that you assume ownership of the incapable person's assets, nor does it mean you become personally liable for their financial obligations. Rather, you manage their assets for them. Upon the death of the incapable person, your duties terminate.
You may also have to make decisions regarding the person's property, decisions he/she would not be able to make him/herself. You cannot, however, make the person's will. You might, for example, have to open or close bank accounts, pay bills, maintain or sell a house or car. Be sure to understand, though, that the power of attorney document may stipulate restrictions on your authority or place conditions on your management of the person's property.
You will receive information about the property you are managing for the incapable person. For example, banks will provide you with details about the person's accounts, payments, loans, safe deposit boxes, etc. As well, you should obtain a copy of the person's will from his/her lawyer. You are entitled to see this as you must try to maintain an even hand between the needs of the person for whom you have the Power of Attorney and the ultimate beneficiaries of his/her estate.
Responsibilities: As power of attorney, legally, you must keep the incapable person's assets and financial transactions completely separate from your own. You must not borrow or use the incapable person's assets for yourself, friends, family, etc.
In determining whether transactions will benefit the incapable person, you must consider the person's comfort and well being. Personal care is a priority, and you must inform the person (to the best of your ability) of your authority and responsibility. When possible, you are to encourage the person's participation in decision making. As well, you should discuss financial decisions with family members who are in regular contact with the person.
You must reasonably determine if the person has a will and learn what it says. If the will, for example, contains a gift of property, you must retain that property so that it may be passed on to the named beneficiary. Only when it is absolutely necessary may that property be sold. That usually means that the sale was required in order for you to fulfill your duties to the incapable person during his/her life.
Compensation: You are entitled to payment as stipulated by the Ontario government, unless the power of attorney document specifies otherwise. The typical rate is 3% on monies received and paid out, and 3/5 of 1% on the average annual value of the assets. This is a management fee. If you receive compensation, the law requires that you exercise the extent of diligence, care, and skill that someone in the business of managing property must.
Obligations: Legally, you must retain records of all transactions involving the incapable person's property. You should periodically submit your accounts to the court before taking your fees for your services. For example, if the dependents of the incapable person, creditors, or the named attorney for personal care request such records, you must supply them.
Keep the following:
- a list of all assets as of the date of your first transactions as power of attorney
- a current list of assets you acquired and disposed of on the person's behalf
- a current list of monies received and paid out on that person's behalf a current list of all investments
If you have any questions regarding the roles of powers of attorney for property, don't hesitate to call me as I am happy to answer any and all questions. And remember: if you don't have powers of attorney in place for yourself, make an appointment. I will do my best to make sure your needs are my first priority.
Revised March 2015