Appointing someone to act as your attorney under a Power of Attorney gives that person the authority to make financial decisions and to execute documents on your behalf if you are not capable of doing those things yourself.
Once appointed, your attorney will have significant responsibilities which include the following:
- Your attorney has a duty to act honestly and in good faith.
- Your attorney must manage your financial affairs.
- Your attorney must keep records of all transactions.
- Your attorney cannot co-mingle your assets with anyone else’s assets, i.e. they must be kept separate.
- Your 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 you made when capable, there will be sufficient assets remaining to meet your needs and the annual total of such gifts does not exceed 10% of your taxable income for the previous year or $5,000, whichever is less.
Your attorney must always act in your best interests, taking into consideration your current wishes, beliefs, values and personal needs. Your attorney must also encourage your 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