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As people get older, it is generally recommended that they appoint a power of attorney (POA). Without fully understanding the extent of the duties and responsibilities, people often accept the role, intending to be as helpful as possible during difficult times in their loved one’s life. Generally speaking, the power of attorney is responsible for making financial and legal decisions on the person’s behalf, in the case where they become incapable of doing so themselves. Usually, the attorney can make any financial or legal decision the person could have made themselves. Before accepting the role of the Power of Attorney, it is important to understand the role (what you might be expected to do) and the rights you have available to you as the person’s attorney.
For the sake of this blog post, we’ll be talking about an enduring power of attorney agreement. This is when the person creates the agreement while they’re still mentally capable. The enduring power of attorney agreement gives the appointed attorney the abilities of a power of attorney in the case that the person becomes incapable of doing so. If the person never becomes mentally incapable, the power of attorney agreement essentially does nothing.
The Power of Attorney Act specifies exactly the duties that an attorney is agreeing to when signing the agreement. According to s.19, the underlying principles and philosophies an attorney must adhere to are to:
In short, the attorney must act honestly and in the best interests of the person they are representing. Further, they must keep detailed accounts of any decisions they’re making on the person’s behalf. In some cases, a decision an attorney must make isn’t always the best financial decision. The attorney must take into account the person’s values and beliefs for any decision they make. More specifically, s.19 states that the attorney must do the following:
While the attorney is able to make any financial or legal decisions that arise (barring restrictions in the agreement), there are some cases where the attorney can act proactively or completely at their own discretion. An example could be electing to give gifts or loans on the person’s behalf. The power of attorney is sometimes in a position where they must do a lot of the estate planning for the incapable person and often times this means gift giving before their death. It’s important to understand that a power of attorney does not have any authority to make a will or change an existing will on the incapable person’s behalf, though the attorney can handle some estate related financial tasks.
For some attorneys, it’s a good idea to hire a professional to assist in some areas of their job. Depending on the circumstances of course, it may be something to consider if the burden of managing another person’s accounts is too much. In some cases, the attorney no longer wishes to continue in this position as the person’s attorney. At any time, the attorney is able to resign as the power of attorney and relieve themselves of all the duties of the power of attorney. To do so, a letter of resignation must be given to the person and any other people acting as a power of attorney.
Another reason one might wish to resign is when the person modifies the POA agreement. The person who creates the agreement can, at any time, modify or revoke the agreement and the attorney must comply with their changes. Further, they don’t need to provide any reasoning for their decision. If the attorney doesn’t agree with the changes, the only option would be to completely resign as the attorney. For a full list of attorney powers, see s.20 of the POA Act.
In the end, the role of a power of attorney can be a difficult task at times. It can be stressful managing one’s own financial and legal affairs, let alone a second person’s. If you are unclear of the role/responsibilities of a power of attorney, contact an experienced estate lawyer today. We can help ensure that you are properly prepared to take on the position as a person’s power of attorney.