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Tuesday, September 21, 2010

What can an Attorney under a Power of Attorney do?

The other day I met with a client who told me that he wanted to appoint his son to be his attorney under an Enduring Power of Attorney. I ran through a list of some of the things that his son would likely have to do should the Power of Attorney come into effect. The client was aghast. "I don't want  him to be able to do all that," he replied. It's intimidating, isn't it, to realize just how much power you're handing over to someone with this document? As soon as my client fully understood the parameters of the job, he changed his mind about who he should put in charge.

Enduring Powers of Attorney (a.k.a. durable power of attorney, continuing power of attorney, power of attorney for property) are not as familiar to people as are Wills. So let's get back to basics and talk about some of the tasks that a person would carry out using this document. Note that in this post I'm not talking about the kind of power of attorney used for banking or business, which is revoked when the donor loses capacity. This post is only about the enduring or continuing type of document that is specifically designed to endure through any mental incapacity of the donor.

Most Enduring Powers of Attorney (EPA) include a clause that says that the person you're appointing (your attorney) can do anything that you can legally do with your money. There are some restrictions built in by law, though on the face of the document those restrictions aren't usually visible.

To be specific, some of the things your attorney will legally be able to do are:
- deposit money to your account
- use a debit card on your account
- change your investments (e.g. from GICs to mutual funds)
- hire people and pay them with your money (e.g. someone to paint your house or fix your car)
- sell, mortgage, rent or renovate your home, cottage or revenue property
- access your safe deposit box
- get information about you from Canada Revenue Agency, and file tax returns for you
- pay your bills using your money
- sell your car
- take over a lawsuit that you're currently involved in
- receive money on your behalf - such as an insurance settlement, sale proceeds or inheritance
- give you a spending allowance or prevent you from having one
- talk to your banker, lawyer, accountant, landlord, financial advisor etc. about you
- apply for benefits such as OAS and CPP on your behalf
- find, read and store your Will
- carry on, wind down or sell your business
- hand over all of your documents and financial information to your executor when you pass away.

This is not an exhaustive list, of course, but it should contain enough examples to give you a good idea of the scope of the authority an attorney will have. The details will depend on your particular situation.

The law says that a person acting under an Enduring Power of Attorney must always act in the best interests of the person he or she represents. There are restrictions such as not being able to use the donor's money to give financial support or benefit to people who are not legally the donor's dependents. Unfortunately, many attorneys appointed under these documents aren't particularly familiar with the intricacies of the law. A few don't really care to find out, and they take advantage of the person who named them as attorney.

If you are looking at this list as you consider who you might want to name, perhaps the list will help you focus on likely candidates. And if you are the person who has been named, perhaps this list will help you decide whether it's a job you want to take on.

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