The test applied to the conduct of the attorney depends on whether the grantor is capable or incapable. As long as the grantor is capable, the attorney is an “agent” of the grantor and can act accordingly; if the grantor is incapable, the attorney is a fiduciary whose powers and duties shall be exercised and performed diligently, with honesty and integrity and in good faith, for the incapable person’s benefit.
An attorney acting under a continuing PoA when the grantor is incapable must focus on the best interests of the grantor. The attorney is not entitled to make decisions based on what is good for the attorney, or to consider or act for the beneficiaries of the grantor when the grantor dies. All of the attorney’s actions should be in the best interests of the grantor of the PoA.
The standard expected of any attorney (for instance, with respect to investments) depends on whether the attorney is being compensated or not.
An attorney who does not receive compensation for managing the property is held to the standard of the degree of care, diligence and skill that a person of ordinary prudence would exercise in the conduct of his or her own affairs. An attorney who is compensated must exercise the degree of care, diligence and skill that a person in the business of managing the property of others is required to exercise.
The attorney shall make the following expenditures from the grantor’s property:
- The expenditures that are reasonably necessary for the grantor’s support, education and care.
- The expenditures that are reasonably necessary for the support, education and care of the grantor’s dependants.
- The expenditures that are necessary to satisfy the grantor’s other legal obligations.
In determining the amounts of expenditures, the attorney shall consider
- The value of the property, the accustomed standard of living of the incapable person and his or her dependants, and the nature of other legal obligations shall be taken into account.
- Expenditures under paragraph 2 may be made only if the property is and will remain sufficient to provide for expenditures under paragraph 1.
- Expenditures under paragraph 3 may be made only if the property is and will remain sufficient to provide for expenditures under paragraphs 1 and 2.
The attorney may make the following expenditures from the incapable person’s property:
- Gifts or loans to the person’s friends and relatives.
- Charitable gifts.
The following rules apply to optional expenditures:
- They may be made only if the property is and will remain sufficient to satisfy the requirements for mandatory expenditures.
- Gifts or loans to the incapable person’s friends or relatives may be made only if there is reason to believe, based on intentions the person expressed before becoming incapable, that he or she would make them if capable.
- Charitable gifts may be made only if,
- the incapable person authorized the making of charitable gifts in a power of attorney executed before becoming incapable, or
- there is evidence that the person made similar expenditures when capable.
- If a power of attorney executed by the incapable person before becoming incapable contained instructions with respect to the making of gifts or loans to friends or relatives or the making of charitable gifts, the instructions shall be followed, subject to paragraphs 1, 5 and 6.
- A gift or loan to a friend or relative or a charitable gift shall not be made if the incapable person expresses a wish to the contrary.
- The total amount or value of charitable gifts shall not exceed the lesser of,
- 20 per cent of the income of the property in the year in which the gifts are made, and
- the maximum amount or value of charitable gifts provided for in a power of attorney executed by the incapable person before becoming incapable
The attorney should consider the grantor’s personal comfort or well-being and manage the grantor’s property in a manner consistent with decisions concerning the person’s personal care made by the grantor’s attorney for personal care.
The attorney should explain to the grantor the attorney’s powers and duties. The attorney should encourage the grantor to participate, to the best of the grantor’s, in the attorney’s decisions.
The attorney should foster regular personal contact between the grantor personally and supportive family members and friends of the grantor, and the attorney should consult from time to time with,
(a) supportive family members and friends of the grantor who are in regular personal contact with the grantor; and
(b) the persons from whom the grantor receives personal care.
The attorney is obliged to review and consider the grantor’s will, and to this end the attorney is entitled to receive a copy of the grantor’s will.
The attorney should not dispose of any property that the attorney knows is subject to a specific testamentary gift in the grantor’s will.
- Choosing the right attorney for property
- What attorneys can do and should not do
- Retention, revocation, destruction and loss of POAs
- Accounting and compensation of attorneys for property