Acting as the attorney for property of an incapable person comes with important responsibilities that should not be taken lightly or underestimated. However, a person who takes on the role may be unaware of their obligations under the Substitute Decisions Act, S.O. 1992, c.30, the legislation in Ontario that governs powers of attorney. In particular:
- Overarching Duty of an Attorney for Property: An attorney for property is a fiduciary, who must exercise their powers and duties diligently, with honesty, integrity and in good faith, for the incapable person’s benefit. The attorney for property cannot favour their own interest over the interest of the incapable person, even if they are a beneficiary under the incapable person’s will.
- Keeping Accounts: An attorney for property must keep account of all transactions involving the incapable person’s property in accordance with the Regulations under the Substitute Decisions Act, as they can be called upon to account for their management at any time. As such, it is good practice for an attorney for property to annotate bank statements, keep receipts and track expenses on a spreadsheet.
- Co-Attorneys for Property: An attorney for property who is appointed along with one or more persons to act as an attorney for property must act jointly with their co-attorney(s) unless the power of attorney document provides otherwise. This means there must be cooperation and transparency between the co-attorneys for property; the co-attorneys for property cannot act unilaterally or against the wishes or knowledge of their co-attorney(s) unless the power of attorney document so states.
- Consultation with Attorney for Personal Care: An attorney for property must manage the incapable person’s property in a manner consistent with decisions being made for the incapable person’s personal care. If someone other than the attorney for property acts as the incapable person’s attorney for personal care, then the attorney for property should consult with the attorney for personal care, become familiar with the care plan, and manage the incapable person’ property accordingly.
- Required Expenditures: An attorney for property must make expenditures from the incapable person’s property that are reasonably necessary for the support, education and care of the incapable person or their dependents, or to satisfy the incapable person’s other legal obligations, taking into account the value of the incapable person’s property and their accustomed standard of living.
- Wills: An attorney for property may do anything with an incapable person’s property that the incapable person could do if capable, except make a will. The attorney for property also has a duty to make reasonable efforts to determine whether or not the incapable person has a will, and if so, what the provisions of the will are.
- Supportive Family and Friends: To the extent possible, an attorney for property should keep the incapable person informed about the management of their property. Moreover, the attorney for property must keep supportive members and friends who are in regular contact with the incapable person informed about how the incapable person’s property is being managed.
- Compensation: An attorney may or may not take compensation for managing the property of an incapable person. Unless the power of attorney states otherwise, the rate of compensation payable from the incapable person’s property is 3% of income and capital receipts, 3% of income and capital disbursements, and 2/3 of 1% percent per year of assets under management (the care and management fee). Compensation may be taken monthly, quarterly or annually. More compensation may be taken if consent in writing is given by the Public Guardian and Trustee and by the incapable person’s attorney for personal care.
- Standard of Care: If an attorney for property does not receive compensation, they must exercise the degree of care, diligence and skill that a person of ordinary prudence would exercise in conducting their own affairs. An attorney for property who receives compensation for managing property shall exercise the degree of care, diligence and skill that a person in the business of managing the property of others is required to exercise.
- Legal Advice: When in doubt, an attorney for property should seek legal advice about their duties and responsibilities. All too often, attorneys for property are unfamiliar with their obligations under the Substitute Decisions Act, or how to navigate tricky and potentially contentious situations. It is prudent to consult a lawyer in such situations to ensure the attorney is on the right track, and to attempt to manage conflicts before costly litigation erupts.
Acting as an attorney for property is an important responsibility. Casual and informal management of an incapable person’s property will only lead to trouble down the road, as will shutting out family and friends who are in regular contact with the incapable person . An attorney for property should familiarize themselves with their obligations under the Substitute Decisions Act, and/or seek legal advice when the situation warrants.
