A power of attorney or executor appointment should come with a guidebook.
And they soon could, if some financial consumer advocates get their way.
Writing for Investment Executive magazine, Mark O’Farrell – the CEO of The Institute of Certified Executor Advisors – and financial affairs author Barb Amsden call for the development of a short self-study program that would cover the ethics, personal fiduciary responsibilities and general duty of care required in a position of trust like an estate executor or attorney for property or personal care.
Their idea is for will makers and POA grantors to require that their chosen appointees take the course first, so that they have a better idea of what’s expected of them in terms of communication, fairness, protection and distribution of assets, reporting and more.
As the authors note, the powers associated with both roles mean that financial abuse is a real risk, but executors and attorneys don’t always need to have bad intentions in order to break the rules, since few Canadians really understand what they are letting themselves in for when they accept an appointment.
In fact, even testators and POA grantors would probably benefit from a short introductory course, judging by nationwide uptake: fewer than half of adult Canadians have a will in place and even fewer have executed POAs.
The biggest problem I find with POAs is that people don’t realize how much they need one until it’s too late. Since they are designed to kick in when a person becomes incapable of handling their own affairs, you must have one in place before disaster strikes. Once a person reaches the point of incapability, they can no longer sign a valid POA, which can leave family members in a very difficult position.
Under provincial legislation, duties are divided between two kinds of POA: attorneys for property, who are granted authority over the grantor’s property, including their finances and bank accounts; and attorneys for personal care, who take responsibility for decisions about the person’s health care broadly, including nutrition, shelter, clothing, hygiene, and safety.
The same person doesn’t have to perform both roles, but each document carries extraordinary power, so make sure you choose people you have absolute faith in.
An experienced lawyer can help grantors set the specific terms that work best for them, including exactly when the POA takes effect and even guidelines for appointees to follow in certain predictable circumstances.
I also suggest that testators give their executors an idea of what is involved with the role before confirming them as their choice under the will. Prospective executors should know that they can expect to be in the job for at least a year, gathering financial information, signing forms, filing taxes, paying off debts and distributing assets under the estate.
Most people have a fairly small roster of people close and trustworthy enough to even consider for such an important job. But the risk of scaring someone off may be one worth taking if it filters out those lacking either the time or inclination to administer an estate, as there’s nothing worse than picking an executor you assume will be willing, only for them to turn down the appointment when the time actually comes.
Disclaimer: The content on this website is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this website are advised to seek specific legal advice by contacting members of Laredo Law (or their own legal counsel) regarding any specific legal issues.
