What to consider when appointing your Powers of Attorney
Powers of Attorney are a vital com- ponent of any effective estate plan, regardless of your age. Whether you are appointing someone or have been asked to act as an Attorney, it’s not a decision to be made lightly.
What it is
A Power of Attorney is a document that legally empowers another person to manage your affairs during your lifetime, should you become incapacitated. Note that in British Columbia these are known as Representation Agreements, and in Quebec they are called Mandates. There are two types: Power of Attorney for Property and Power of Attorney for Personal Care.
The person appointing a Power of Attorney (POA) is referred to as a “grantor,” and the POA is referred to as an
“attorney” (the term “attorney” should not be confused with “lawyer,” commonly referred to as an “attorney” as well).
Power of attorney for Property
A Power of Attorney for Property gives a designated individual the power to do anything with the grantor’s property, with the exception of making a Will.
An attorney must exercise his or her duties diligently, honestly, and in the best interests of the grantor. Some of the required duties are the following:
- Making expenditures for the support, education, and care of the grantor or the grantor’s dependants.
- Keeping accounts of all transactions.
- Filing income tax returns.
- Maintaining an inventory of all the grantor’s assets, which includes recording all assets that are bought or sold, complete with dates, amounts, reasons, and other relevant details.
- Preserving any property specifi- cally bequeathed in the Will.
To the extent possible, the attorney should consult the grantor on decisions. In addition, it’s a good idea for the attorney to consult with relatives, friends, and other attorneys on behalf of the grantor and facilitate contact between the grantor and supportive relatives and friends.
An attorney must not disclose information contained in the grantor’s accounts and records, except to the grantor, the grantor’s attorney for personal care, or the public guardian and trustee. An attorney for property is entitled to charge a fee for services, which is set out by law.
Challenges and risks
Managing someone’s property can be complex and time-consuming, especially if the grantor owns a business or has minor children. When agreeing to be an attorney for property, a person should recognize that he or she will assume a legal liability for any breach of an attorney’s duties and be personally liable for mistakes. An attorney is also open to criticism from family members and friends who may not agree with what is being done and how.
An attorney should ensure that if there is a conflict of interest, such as being a beneficiary in the Will, he or she takes actions that are clearly in the best interest of the grantor.
Power of attorney for Personal Care
An attorney for personal care is someone who makes decisions about a wide range of issues — the grantor’s health care and medical treatment, where the grantor will live, his or her food, clothing, hygiene, and safety — when the grantor becomes unable to make those decisions.
The document may also spell out the grantor’s wishes regarding the use of medical measures to prolong his or her life if there is no reasonable prospect of recovery. Therefore, naming an attorney for personal care is an extremely important decision that deserves much consideration. Including as many specifics as possible is crucial to one’s wishes being carried out properly.
To view a video presentation on Powers of Attorney, visit the ScotiaMcLeod public website at www.scotiamcleod.com and access the webcast feature within the Financial Insights section of the site.
For assistance with your estate planning, including Wills and Powers of Attorney, contact us anytime.