The role, powers and obligations of an attorney for property are set out by statute (Substitute Decisions Act, 1992) as interpreted by the courts (called common law).
If a person is unable to look after or may need help with his or her own affairs such as banking, paying bills, buying necessary items, or dealing with his or her assets or day-to-day finances, an attorney for property steps into the shoes of that person to make substitute financial decisions and manage the assets for the person’s behalf or benefit.
Passing control of the management and decision making authority to an attorney does not, however, mean transferring ownership of the assets or liabilities; ownership legally remain with, and should remain in the name of the grantor or incapable person.
An attorney for property is allowed do on the grantor’s behalf anything the grantor could do if capable, except make a Will. This means for example: pay bills, pay income taxes, collect debts, open and close bank accounts, deal with investments, deal with (sell, store, lend) personal belongings, maintain or deal with a house or vehicle, apply for benefits (e.g., supplementary income benefits), and choose pension options (unless restricted in the power of attorney document) – anything and everything except make a Will or anything that is considered like making a Will.
In the management of property, unless otherwise restricted, the attorney may obtain information from any person or business. This includes real estate, investments, pensions, personal property, and a copy of the grantor’s Will if there is one so that the property may be managed to the extent possible in accordance with the wishes expressed in it. However, there are exceptions and this rule may be departed from if selling the property is absolutely necessary to allow the attorney to fulfill his or her duties.
The substitute decision maker plays an important role in making decisions that impact the grantor’s life; the attorney, therefore has certain duties and obligations to ensure diligence and honesty and that all actions taken are for the grantor’s benefit including:
Comfort and Well-Being: The attorney must consider the personal well-being and comfort of the grantor when making financial decisions. The transactions must be for the grantor’s benefit.
Management of Property: The attorney must manage the assets in a way that best accommodates the decisions that need to be made and in the best interests of the grantor. For example, if the grantor expressed the wish to remain living at home but now requires 24/7 care that can only be afforded if the house is sold. Here, the need for resources to fund the care would normally outweigh the wish to remain in the house.
Plan: The attorney should create an investment plan for the person’s assets and finances which outlines the details of the investment guidelines (much like the “know your client” process) and establish a budget. The plan should be regularly reviewed and amended from time to time as circumstances change.
Expenditures: There are certain required expenditures and certain discretionary expenditures that the attorney must or may make on behalf of the grantor. Provided there are sufficient funds, an attorney is required to make the following expenditures from the grantor’s property:
- To support and care for the grantor;
- To maintain and educate the grantor’s dependants;
- To meet the grantor’s legal obligations.
The attorney may make:
- Gifts or loans to the grantor’s friends and relatives if the grantor before becoming incapable indicated that he or she would make these gifts or loans and has not indicated otherwise;
- Charitable gifts with restrictions if the grantor while capable made similar gifts or authorized these gifts in a power of attorney document before becoming incapable provided the grantor has not indicated otherwise.
Keep Grantor and Others Informed: The attorney must try to keep the grantor informed to the extent the grantor
is able to understand and should consult with the grantor and supportive family and friends and caregivers who are in regular contact with the grantor to the extent possible.
Keep Separate Records: The attorney must keep the grantor’s financial records and transactions completely separate from their own. An attorney must not borrow or use the grantor’s money as his or her own or for his or herself unless authorized by the court.
Maintain and Pass Accounts: The attorney is legally required to keep accounts and records of each transaction undertaken with respect to the grantor’s property and may be required to pass or submit these accounts to the court for inspection. The attorney may apply to pass accounts voluntarily or may be required to do so by the grantor, the Public Guardian and Trustee, the grantor’s attorney for personal care, a creditor, dependant, the Children’s Lawyer, or anyone else with the court.
The records must be kept by the attorney until he or she is no longer the attorney for property and either another person is appointed attorney (or guardian) and accounts have been delivered, or the grantor dies and accounts have been delivered or the attorney is discharged by a court and the time for appealing has expired, or a court directs the attorney to destroy the records, or if the attorney is provided with a release signed by the grantor who is now capable, or by a legal representative of the person’s estate or by a new attorney.
The records that must be kept include:
- The original power of attorney document or court order of appointment;
- A copy of the property management plan if one was made;
- A copy of the Will;
- A list of all the grantor’s assets (real estate, bank accounts, personal items, investments, vehicles, securities, cash) as of the date of appointment or when one started to act as attorney (informally or not);
- A list of all the grantor’s liabilities (debts) as of the date you were appointed or started to act as attorney (informally or not);
- A current list of all assets acquired and disposed of including the date and reason for buying or selling the assets and the names involved;
- A current list of all money paid or received on behalf of the grantor including all the details (date, reason, account details, persons involved);
- A current list of all investments made on behalf of the grantor with the details (date, amount, interest rate, type of investment);
- A list of all liabilities paid on behalf of the grantor including the date, nature of the liability, person involved and reason for discharge;
- An up to date list of all compensation taken as attorney with the details (date, amount, method of calculation and a list of assets used to calculate the amount).
It is also helpful to keep a diary of action taken and decisions made and a record of how the decision was made and why.
Maintain Confidentiality: The attorney is not permitted to disclose information about the grantor’s property or records unless required to do so in order to carry out the transaction or to carry out his or her duties as attorney. For example, if requested, copies of records must be produced to the grantor, his or her attorney for personal care, and the Public Guardian and Trustee.
An attorney may be paid for the time and effort or work performed, subject to court order. The annual compensation is set out in a fee scale (Ontario Regulation 159/00). This scale is based on a percentage of the capital and income received and disbursed and assets under management. You may be entitled to more compensation if you receive written consent from the Public Attorney and Trustee and the grantor’s attorney of the person or attorney under a power of attorney for personal care or court order.
Directions from Court
If guidance is needed regarding a proposed course of action, or if there is uncertainty or conflict/difference in opinion an attorney may apply to the court for directions. But note, the court is not a substitute decision maker for the attorney and will generally not make a decision it believes it is one the attorney should be able to make.