If You Are an Ontario Attorney for Property, These 3 Mistakes Can Cost You Money

The other day, a client asked me if a nephew who was 19 years old could be appointed as an attorney for property. Here is my answer.

The minimum age requirement for attorneys for property in Ontario is 18. However, you must confirm that the attorney is capable and can be trusted. If the nephew needs to use a power of attorney for property (POAP), he should reside in Ontario and seek legal advice before acting as an attorney.

Attorneys for property have legal obligations. They commonly make these 3 mistakes:

1. Not keeping records of all their transactions to answer reasonable questions.
2. Failing to act jointly with any other named attorneys for property as required.
3. Not verifying the power of attorney for property document is legal and complying with all conditions.

Ontario law does not specify a standard form or template for a power of attorney for property document. As a result, each POA must be inspected by every person or financial institution that relies on the document. Witnesses to the POAP may need to be contacted.

Failing To Verify the POA Is a Costly Problem

Imagine what happens if you sell a person’s car or their house but the POAP is not valid or was cancelled.

If the attorney is named with other attorneys, then Ontario’s Substitute Decisions Act, 1992 requires that attorneys act jointly unless the power of attorney for property provides otherwise.

If joint decisions are not required, then the POAP should specify how attorneys may act independently or individually. This could lead to conflict if they disagree. Each attorney may require their own lawyer to advise them of their legal duties.

Attorneys can be sued and held personally responsible for damages and breach of their duties. Attorneys should obtain legal advice before they act. This advice is necessary to protect attorneys. If the grantor of the POA is incapable or owns real estate, a business or cannot support themselves, attorneys need proper legal advice to avoid trouble.

In any of the above circumstances, attorneys for property may decide to renounce and decline the job before they assume any risk or personal liability.

Deadlock Provisions

If multiple attorneys are named in the POAP, then a provision should be included to deal with any deadlock. For example, if three attorneys are named, the grantor of the power of attorney should specify if a majority of the attorneys must agree on any decision. This could be the decision, for example, to sell a home.

Remember that if the POAP says you cannot charge a fee for your time and services in the POAP, you are if prohibits them from taking a fee.

You may wish to decline to act if you cannot charge the government-prescribed fees. If there is an alternative attorney named in the document, you may be in luck. If they take over, you will be off the hook. And, like the nephew who was 19 years old, be happy you did not take on the risk.

Do you need help with checking or making your powers of attorney or your estate plan? Contact me for a meeting. I look forward to helping you.

Want more information about powers of attorney? Contact me to join my next webinar on powers of attorney.

Estate law is all I do.

Ed Olkovich