In my most recent blog, I described the duties of a person who is appointed Attorney under a Continuing Power of Attorney for Property (“POAP”).
Not only is it critical for an Attorney under a POAP to know her/his duties which the law imposes, but the importance of understanding the limits the law places on an Attorney’s right to spend money belonging to the incapable person (the “Grantor”) of the POAP cannot be overstated.
The Substitute Decisions Act (Ontario) (the “Act”) deals with the terms under which an Attorney may spend the Grantor’s money. There are “Required Expenditures” and “Optional Expenditures”.
- Required Expenditures are those that are:
- Optional Expenditures are:
(i) reasonably necessary for the Grantor’s support and care;
(ii) reasonably necessary for the support, education and care of any dependents of the Grantor; and,
(iii) necessary to satisfy the Grantor’s other legal obligations.
In considering making any of the above expenditures, the Attorney must take into account the value of the Grantor’s property, the accustomed standard of living of the Grantor and her/his dependants and the nature of other legal obligations of the Grantor.
(i) gifts or loans to the Grantor’s friends and relatives; and
(ii) charitable gifts.
Optional Expenditures may only be made if the assets of the Grantor are and will remain sufficient to satisfy the obligations relating to Required Expenditures.
Gifts or loans described in (i) may only be made if the Attorney has reason to believe, based on the Grantor’s intentions expressed before she/he became incapable, that she/he would make them if capable.
If a POAP contains instructions to the contrary, such instructions must be followed.
Charitable gifts may only be made if the Grantor authorized the making of charitable gifts in a POAP executed before becoming incapable (any specific instructions in such a POAP must be followed) or there is evidence that the Grantor made similar expenditures when capable. The total amount or value of charitable gifts shall not exceed the lesser of,
(i) 20 per cent of the income of the property in the year in which the gifts are made, and
(ii) the maximum amount or value of charitable gifts provided for in a POAP executed by the Grantor before becoming incapable.
How can Tierney Stauffer LLP help?
The estates lawyers at Tierney Stauffer LLP are experienced in carefully and thoroughly drafting and giving advice regarding the legal requirements of Continuing Powers of Attorney for Property.
Please do not hesitate to contact me for more information on how I can assist you in respect of your meeting the legal obligations imposed on you as an appointed Attorney.
John S. Grant, Q.C
Senior Legal Advisor – Business Law and Estates Groups
Disclaimer: This article is provided as an information resource. This article should not be relied upon to make decisions and is not intended to replace advice from a qualified legal professional. In all cases, contact your legal professional for advice on any matter referenced in this document before making decisions. Any use of this document does not constitute a lawyer-client relationship. Please note that this information is current only to the date of posting. The law is constantly changing and always evolving.