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By preparing a power of attorney for property, one appoints a substitute decision-maker to make decisions on one’s behalf once they become incapable. With the powers bestowed upon the attorney, however, come duties as well. In an age where people are living longer and longer, the appointment of an attorney is becoming more common. Unfortunately, not every attorney is aware of the duties he or she has in fulfilling this role. As a result, I thought I would take this opportunity to review some of the duties imposed upon an attorney for property.
In order to properly understand the duties an attorney for property has, it must be determined whether the donor is in fact capable. This determines whether the relationship between the attorney and the donor is one of agency or that of a trustee. In Banton v. Banton (1998), 164 D.L.R. (4th) 176, Cullity J., at 239, states:
“An attorney for a donor who has mental capacity to deal with property is merely an agent and, notwithstanding the fact that the power may be conferred in general terms, the attorney’s primary responsibility in such a case is to carry out the instructions of the donor as principal. As an agent, such an attorney owes fiduciary duties to the donor but these are pale in comparison with those of an attorney holding a continuing power when the donor has lost capacity to manage property”.
Once a grantor becomes incapable, the attorney must make decisions pursuant to s. 32(1) of the Substitute Decision Act, 1992 (the “SDA”), which provides:
“A guardian of property 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”.
Clearly, the duty expected is of a much higher standard.
In addition, s. 32(6) of the SDA requires that an attorney keep accounts of all transactions involving the grantor’s property. This must be read in conjunction with s. 2(1) of the Ontario Regulation 100/96, which provides an extensive list of what should be included, amongst other things:
An attorney for property must continue such accounts until he or she ceases to have authority and is discharged by the court on a passing of accounts under s. 42 of the SDA.