POWERS OF ATTORNEY FOR PROPERTY REVISITED - PART III
The relationship between the grantor of the Power of Attorney and the Grantee (“the Attorney for Property”) will vary depending on the grantor’s capacity. The Power of Attorney may provide that the Attorney for Property is to act on behalf of the grantor either before and/or subsequent to any incapacity (of the donor) to manage property.
If the Attorney for Property acts prior to any incapacity on the part of the grantor, s/he is acting as a fiduciary. However, in such capacity, the Attorney for 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 instructions of the donor as principal.”
Incapacity to manage property is defined in the SDA s. 6 as follows:
“A person is incapable of managing property if the person is not able to understand information that is relevant to making a decision in the management of his or her property, or is not able to appreciate the reasonably foreseeable consequences of a decision or lack of a decision.”
Although the relationship, even after incapacity, technically remains one of principal and agent, in practice the relationship is fiduciary (the “principal” having lost the capacity to instruct the “agent”). Although the Attorney for Property does not act subject to the provisions of the Trustee Act, the provisions of the Substitute Decisions Act impose the typical obligations of a trustee on the Attorney for Property. And, as Justice Cullity notes, the terms of the actual document may include provisions that will guide the actions of the Attorney and evidence the intentions of the Grantor.
Subsequent to the grantor’s incapacity, the attorney must obtain the grantor’s Last Will in order to ensure that dispositions of real estate are not made that are specifically provided for in the Will. While the attorney has the authority to do anything except make a Will on behalf of the incapable donor, his or her actions are restricted by the terms of the Last Will. If the Last Will of the grantor specifically provides for the transfer of a piece of real estate to a specific person, the attorney must not take steps to sell the property unless it can be demonstrated that such sale is necessary (see s.35.1 of the Substitute Decisions Act).
Have a great day, David
