Powers of Attorney
The purpose of appointing someone to act as an Attorney is to give that person the authority to make financial decisions and to execute documents on your behalf if you are not capable of doing these things yourself.
Attorneys once appointed have significant responsibilities which include the following:
- Attorneys have a duty to act honestly and in good faith.
- Attorneys must manage the grantor’s financial affairs.
- Attorneys must keep records of all transactions.
- An attorney cannot co-mingle the grantor’s assets with anyone else’s assets, i.e. they must be kept separate.
- An attorney may not transfer or gift assets to anyone unless the transfer or gift has been authorized in the Power of Attorney document or if the nature of the gift is in line with gifts the grantor made when capable, there will be sufficient assets remaining to meet the grantor’s needs and the annual total of such gifts does not exceed the lesser of 10% of the grantor’s taxable income for the previous year and $5,000.
An attorney must always act in the best interests of the grantor, taking into consideration the grantor’s current wishes, beliefs and values and the personal needs of the grantor. An attorney must also encourage the grantor’s involvement in decision-making whenever possible.
If an attorney breaches these duties they can be charged with a criminal offence such as forgery, breach of trust or theft or they can be named in a civil suit.
Deborah A. Todd