Choosing the right attorney
Choose carefully: an attorney has enormous power
Being an attorney is a demanding job that requires skill, integrity and judgment. It is not easy, or quick, or just a favour. An attorney has enormous power, and an incompetent or selfish attorney can do a lot of damage.
Choosing an attorney is not about choosing who is nicest or closest to you.
At the best of times being an attorney requires paperwork, keeping good records and handling forms and money. The attorney should be able to invest funds prudently, hire and instruct professionals like lawyers and accountants, open and close bank accounts, and complete and file tax returns. Make sure that you choose someone who has the right skills and aptitude.
Location
The attorney is not required to be resident in Ontario. In practice, however, it is easier if the attorney can be physically present fairly regularly.
If you have assets in more than one jurisdiction you should consider multiple powers of attorney, drafted in accordance with the laws of each jurisdiction and limited in scope to the assets in particular jurisdiction.
Compensation
Being an attorney is a demanding job. Being an attorney is not something one should do ‘as a favour’, nor ask someone to do ‘for nothing’. You should consider whether your attorney should be compensated for acting, and ideally address the issue one way or the other in the power of attorney document. If the compensation is not addressed in the PoA, the attorney can apply to the Court to be compensated. Currently, the general rule (which can be varied) is that compensation will be 3% of all capital & revenue receipts, 3% of capital and revenue disbursements, and 0.6% for annual care.
Avoid conflicts of interest
It is important not to choose an attorney who will automatically be in a conflict of interest. This is guaranteed to create distrust and often creates acrimony and disputes. These disputes can destroy families!
For instance, an attorney who is also a beneficiary of your estate can have a conflict between spending money on your care while you are alive and maximizing their inheritance. Similarly, the attorney might want to take funds from the estate for their own purposes, to avoid sharing them with other beneficiaries. This not as uncommon as it should be for for adult children, and you should give this conflict of interest, and the potential problems it can create, serious thought before granting the PoA.
Choose successor attorneys
A power of attorney can last a long time after grant, whether the attorney is acting on it or not. Someone who was a perfectly suitable attorney at one time, may no longer be able or willing to act many years later. You should name at least one alternate attorney.
Consider using a professional
Unless you have a relative or friend who happens to enjoy filing legal forms and doing taxes and accounting, you should consider appointing an independent professional who is not a beneficiary of the estate to be your attorney. Often, this will get the job done ‘better, faster’ and without the risk of poisoning family relationships.