How’s your Power? Find out how the changes to the Power of Attorney Act will affect you./ Posted in News & Events, Wills, Trusts & Estates
Substantial amendments to the Power of Attorney Act came into effect on September 1, 2011. In many respects, the changes are simply a codification of the rules that already exist at common law relating to an Enduring Power of Attorney. Over 30 new provisions have been added to the Act to clarify the rights and obligations of the attorney being appointed under an Enduring Power of Attorney. The Act now expressly states that an attorney must act honestly and in good faith, exercise the care diligence and skill of a reasonably prudent person, and act within their authority. The Attorney’s duty to act in the adult’s best interests, taking into account the adult’s current wishes, known beliefs and values, has also been included in the amendments to the legislation.
The new provisions of the Act also provide guidance to attorneys regarding how they are to act in exercising their powers. An attorney is now statutorily required to give priority to the adult’s personal care and health care needs, and to promote the adult’s independence and involvement in decision-making. The revised Act now requires that the attorney keep and produce financial records, including a current list of the adult’s property and liabilities with estimates of their values, invoices, bank statements and other records necessary to provide a full accounting of any receipt or disbursement of any on behalf of the adult.
New provisions have been added to restrict the type of person who may act as an attorney and restrict the attorney’s discretion in dealing with the adult’s assets on their behalf. As an example, a paid caregiver is specifically prohibited from acting as an attorney for the adult, unless that caregiver is a family member. Another new restriction relates to making a gift, loan or charitable gift from the adult’s assets. An attorney may make a gift or loan, or charitable gift, from the adult’s property, only if expressly permitted by the Power of Attorney OR if the adult usually made such gifts; there would be sufficient property remaining to meet the adult’s needs; and as long as the total value of all gifts, loans and charitable gifts made by an attorney in a year are not more than 10% of the adult’s taxable income for the previous year OR $5,000.00, whichever is the lesser of the two.
So you’re probably asking yourself “How does this affect ME?” Well if you have already granted or been appointed under an Enduring Power of Attorney before September 1, 2011, the Enduring Power of Attorney will remain valid as long as it complied with the provisions of the Act in force prior to September 1, 2011.
If you are considering granting an Enduring Power of Attorney or acting as an attorney, it is important to know what responsibilities you will be obligated to fulfill as the attorney, as the requirements under the new Act can be quite onerous.
If you would like any further information regarding the changes, or need assistance with your estate planning, please do not hesitate to contact me directly at 250-980-3362 or by email at Deanna@montgomerymiles.com.
Photo courtesy of Gunnar Wrobel