POWERS OF ATTORNEY FOR PROPERTY REVISITED - PART I
Hi. My name is David M. Smith. I am a partner at Hull & Hull LLP. This week’s blogs provide an overview of the law relating to Continuing Powers of Attorney for Property (“Power of Attorney”) and to consider various issues commonly encountered in circumstances wherein someone delegates authority to a grantee under a Power of Attorney.
The purpose of a Power of Attorney is to provide for a substitute decision maker for the grantor in the event of certain contingencies, the most common of which being the mental incapacity of the client. Indeed, many Powers of Attorney only take effect upon the incapacity of the grantor.
Where the grantor is capable and trusts the grantee to act on his of her behalf at any time and for any purpose, the Power of Attorney will contain no restrictions and will take effect immediately upon execution.
There are, however, many situations in which a person will make a Power of Attorney to take effect for a specific purpose while the grantor is mentally capable but, for one reason or another, unable to attend to the specific transaction. For instance, the grantor may be out of the country at the time that a specific transaction is to take place, or simply too busy with other matters.
In the absence of restrictions contained in the Power of Attorney, an attorney has power to do on the grantor’s behalf anything in respect of property except make a will. (see s. 31(1) Substitute Decisions Act).
For example, one of the parties to a real estate transaction under the Land Titles Act may grant authority to a third party, by way of a Power of Attorney for Property, to act on his or her behalf to complete such transaction.
For the purposes of registration, a Power of Attorney containing no restrictions will be registered as a “General Power of Attorney.” Conversely, a Power of Attorney whose use is restricted to a specific parcel of land will be registered as a “Limited Power of Attorney.”
The Attorney for Property is primarily accountable to the grantor of the Power of Attorney. The Substitute Decisions Act is clear that the Attorney for Property acts for the benefit of the grantor.
However, subsequent to incapacity, the incapable grantor is the one person who is not capable of scrutinizing the corporate attorney’s actions.
The Public Guardian and Trustee may be entitled to an accounting from an Attorney for Property acting during the grantor’s incapacity.
However, on the death of the incapable donor, the Attorney for Property’s actions may come under scrutiny from the beneficiaries of the estate. The beneficiaries’ argument will be that the Attorney for Property must be able to demonstrate that his or her actions were prudent in all of the circumstances.
Have a great day. David Smith
The purpose of a Power of Attorney is to provide for a substitute decision maker for the grantor in the event of certain contingencies, the most common of which being the mental incapacity of the client. Indeed, many Powers of Attorney only take effect upon the incapacity of the grantor.
Where the grantor is capable and trusts the grantee to act on his of her behalf at any time and for any purpose, the Power of Attorney will contain no restrictions and will take effect immediately upon execution.
There are, however, many situations in which a person will make a Power of Attorney to take effect for a specific purpose while the grantor is mentally capable but, for one reason or another, unable to attend to the specific transaction. For instance, the grantor may be out of the country at the time that a specific transaction is to take place, or simply too busy with other matters.
In the absence of restrictions contained in the Power of Attorney, an attorney has power to do on the grantor’s behalf anything in respect of property except make a will. (see s. 31(1) Substitute Decisions Act).
For example, one of the parties to a real estate transaction under the Land Titles Act may grant authority to a third party, by way of a Power of Attorney for Property, to act on his or her behalf to complete such transaction.
For the purposes of registration, a Power of Attorney containing no restrictions will be registered as a “General Power of Attorney.” Conversely, a Power of Attorney whose use is restricted to a specific parcel of land will be registered as a “Limited Power of Attorney.”
The Attorney for Property is primarily accountable to the grantor of the Power of Attorney. The Substitute Decisions Act is clear that the Attorney for Property acts for the benefit of the grantor.
However, subsequent to incapacity, the incapable grantor is the one person who is not capable of scrutinizing the corporate attorney’s actions.
The Public Guardian and Trustee may be entitled to an accounting from an Attorney for Property acting during the grantor’s incapacity.
However, on the death of the incapable donor, the Attorney for Property’s actions may come under scrutiny from the beneficiaries of the estate. The beneficiaries’ argument will be that the Attorney for Property must be able to demonstrate that his or her actions were prudent in all of the circumstances.
Have a great day. David Smith
