Amendments To The Power Of Attorney Act, In Force September 1, 2011
NEW RULES for Attorneys
A number of significant changes to the Power of Attorney Act come into effect on September 1, 2011. These amendments will entrench the Enduring Power of Attorney as the document of choice for most people who wish to plan for the management of their financial affairs in the event of incapacity. Enduring Powers of Attorney of the old Act are grandfathered and deemed to be Enduring Powers of Attorney under the revised Power of Attorney Act.
In relation to an attorney’s duties, essentially the common law has been codified – an attorney must act honestly and in good faith, exercise the care diligence and skill of a ‘reasonably prudent person’ and act within his/her authority granted under the Enduring Powers of Attorney. Further, the general duty of the attorney to act in the adult’s best interests, taking into account the adult’s current wishes, known beliefs and values is also solidified by the legislation. An attorney is also required to give priority to the adult’s personal care and health care needs, and to promote the adult’s independence and involvement in decision-making, to the extent that is reasonable. A paid caregiver is specifically prohibited from acting as an attorney for the adult.
In addition to a codification of the common law, the legislation will also introduce a new and stringent statutory requirement on the attorney to keep and produce financial records. These records include a current list of assets and liabilities, including values, invoices, bank statements and other records as required to provide a full accounting of receipts and disbursement, and income and capital. The duty to keep such records applies to “the period for which the attorney is acting.” This is an onerous task for an attorney and careful consideration will now need to be given by both parties when asking the question “Who should I appoint to act as my attorney?” and on the flip side “Do I want the responsibility of acting as an attorney?”
Two other noteworthy duties on an attorney are to keep the adult’s personal effects at the adult’s disposal to the extent reasonable and to keep the adult’s property separate from the attorney’s (there is an exception for property that is jointly owned by the adult and the attorney).
Finally, it is important to note that an attorney may make a gift or loan, or charitable gift, from the adult’s property, if permitted by the Power of Attorney or if the adult usually made such gifts and there would be sufficient property remaining to meet the adult’s needs, as long as the total value of all gifts, loans and charitable gifts made by an attorney in a year are not more than 10% of the adult’s taxable income for the previous year OR $5,000.00, whichever is the lesser of the two.
This is intended as a summary of an attorney’s duties under the new legislation and is provided as information ONLY; it should not be construed as legal advice. For more information on estate planning documents and to discuss your specific circumstances, please contact Vanessa DeDominicis on 250-869-1140 or firstname.lastname@example.org