Using Powers of Attorney for Property in Ontario
“What do I need to know about using powers of attorney for property in Ontario?” Dorothy was asking this question sitting in my Toronto law office.
Dorothy needed to act under a power of attorney (POA).
“What is the law in Ontario?” she asked.
“Let me give you a list of tips. But you should get legal advice.”
“Why?” asked Dorothy.
“POAs are legal documents. You need legal advice to review them and understand your legal duties.”
3 Reasons Ontario Attorneys Need Lawyers
You want a lawyer to review the POA because:
1. There are no statutory or standard forms for a property power of attorney in Ontario. The POA document must, however, meet other formal legal and witnessing requirements. If the document does not legally comply, it is not valid.
2. You need to confirm your authority before you act as attorney. You may be exposing yourself to dangers. You need advice about what you can or cannot do as an attorney.
Learn the risks before you make costly mistakes.
3. If a person is incapable they cannot manage their property. You have additional legal responsibilities.
Take these first steps as attorney for property
- locate the original POA document – only this is valid
- check to see if there are any restrictions or conditions on you beginning to act as attorney
- make sure you have no conflicts of interest
- check to see if any other concurrent power of attorney documents exist
- secure the original documents and give only notarized copies to third parties
- locate and secure the incapable person’s assets – identify what assets may be in control of a third party and notify them of your authority
- obtain copies of wills, insurance policies, bank accounts and other certificates
- review income tax returns and documents relating to loans or guarantees of debt (business or personal)
- confirm all insurance policies are up to date (cars, homes, valuables)
- arrange for maintenance of real estate
- secure credit cards, cheques and identity documents
- obtain online passwords
- create an ongoing list of all assets and liabilities – this is from the date you start acting as attorney
Identify Your Attorney Obligations
- prepare a monthly cash flow statement
- are there any dependent spouses, children? Determine what amounts may need to be allocated for their needs
- review any separation, cohabitation, prenuptial or divorce agreements for support
- review any contracts or improper gifts made
- review and confirm any outstanding obligations that are to be honoured
Ongoing Property Management
- develop a plan for assets and liabilities and decide whether current obligations can be met with existing income
- develop a personal budget and investment plan based on income
- hire tax and legal advisors to deal with any outstanding business transactions relating to a business or a liability
- maintain proper recording and financial records to report to the grantor, or later their estate or court
Never forget that you are acting for a person who is vulnerable. They are at your mercy. The courts hold attorneys to the highest standard of care.
Attorneys are fiduciaries.
You are in a position of trust controlling another person’s money. You must be prepared to account for every penny. So keep records of your financial dealings.
Edward Olkovich (BA, LLB, TEP, and C.S.) is an Ontario lawyer, nationally recognized author and estate expert. He is a Toronto based Certified Specialist in Estates and Trusts. Edward has practiced law since 1978. © 2014Posted By: Ed Olkovich In: Estates, Powers of Attorney On: March 31st, 2014