ARE YOU PREPARED?
Are you an Attorney appointed under an Enduring Power of Attorney? What do you do? Do you know what your duties and obligations are? These are questions that people will have to ask themselves as more of our population ages and people plan for possible future incapacitation through the use of Enduring Powers of Attorney. Enduring Powers of Attorney ("EPA") were introduced in Alberta law in 1991. You have probably read many things about you, yourself, making a Power of Attorney (the person called the "Donor") but little has been written about the Attorney appointed. If you have been appointed as an Attorney or are considering agreeing to being an Attorney, there are a number of things you should know and consider.
THE DOCUMENT
The first thing to ensure is that the document you are acting under is legally valid and properly executed. This is important if it is an Immediate Enduring Power of Attorney which continues beyond the incapacitation of the Donor. If you are appointed under a Springing Enduring Power of Attorney, your duty as Attorney commences only if the Donor becomes incapacitated in the future. If the Donor becomes incapacitated, you must take steps to bring the Power of Attorney into effect at that point in time. The EPA will usually set out what event brings the EPA into effect and which persons are authorized to say that that event has occurred. Most EPA come into effect on mental incapacitation and require that the Attorney take the Donor to a medical doctor and require that the medical doctor sign a declaration that the Donor is incapacitated.
REVIEW OF THE DOCUMENT
A review of the document will also set out any conditions or restrictions placed on your power as Attorney and also will set out whether or not you have extra powers over and above the common law. The law also provides and sets out certain duties of an Attorney. The law sets out that as an Attorney, you have the authority to "do anything on behalf of the Donor that you can lawfully do by an Attorney". But what does this mean? This power is very broad. The Act also gives the power to an Attorney to exercise his authority for the maintenance, education, benefit and advancement of the Donor's spouse and dependent children.
WHEN DO YOU TAKE STEPS?
If you are appointed under a Springing Enduring Power of Attorney, the legislation sets out that as an Attorney you have a positive duty to exercise your powers to protect the Donor's interest during any period in which you know the Donor is unable to make reasonable judgments in respect to their own money. If you commence acting as an Attorney and you no longer wish to continue to act, you must go to Court and be discharged as Attorney.
DUTY
An Attorney is a fiduciary which means that the relationship between the Donor and the Attorney is one involving confidence and trust. A fiduciary involves an obligation to act for the benefit of another person and exercising your discretion in acting for another person. You have a duty to avoid any conflicts with the Donor, a duty not to profit from acting as an Attorney, a duty of loyalty to the Donor, a duty to keep your own property separate from the Donor's and a duty to account for all transactions entered into on behalf of the Donor. An all encompassing statement describes an Attorney's duty as a duty of "utmost good faith". An Attorney can take no personal profit or gain from being an Attorney and must only enter into transactions on behalf of the Donor which are fair and reasonable. An Attorney should never buy or purchase property owned by the Donor without specific authority to do so or approval by the Court. An Attorney cannot do anything that conflicts with the Donor's best interests.
WHAT DO YOU ACTUALLY DO?
In holding the Donor's property you must first and foremost provide for the care of the Donor and preserve and manage the Donor's property. You should register a copy of the EPA with all banks where the Donor did his or her banking and at the Land Titles Office if the Donor owned land. You must, depending on the assets of the Donor, deal with the following:
All of these decisions and actions must be made in the context of providing for the Donor in accordance with the standard of living the Donor had prior to incapacitation, the Donor's estate size and recognizing that the assets of the Donor may be needed on a long term basis depending on the Donor's life span.
Gifts, birthday presents and seasonal gifts to adults, adult self-supporting children and grandchildren should be made only if this power is specifically set out in the EPA. If the ability to give these gifts is granted, they must be given only in consideration with the size of the Donor's estate. Also, even if a Donor had made well-documented charitable donations prior to his or her incapacitation, charitable donations can only be made if the power to do so is specifically given in the EPA.
CAN AN ATTORNEY BE PAID FOR HIS OR HER TIME?
Compensation for acting as an Attorney can only be taken out of the Donor's estate if the EPA gives you the power to do so.
DO I KEEP RECORDS/
An important aspect of an Attorney's duty is to maintain an accurate accounting of all transactions entered into and all decisions made with respect to the Donor's financial affairs and property. An Attorney would be required to report to the Personal Representative of the Donor's estate on the Donor's death.
CONCLUSION
As an Attorney you must always make decisions about the Donor's investments and financial affairs as a reasonable person making decisions about his or her own money would do.
If you have concerns about your authority as an Attorney, you should always obtain proper legal advice.