Continuing Powers of Attorney for Property are one of the documents frequently executed in estate planning practices.
The majority of Continuing Powers of Attorney for Property have no restriction in the authority given to the Attorney for the management of the grantor’s property. As such, the Attorney, when acting pursuant to an unrestricted Power of Attorney for Property, can administer the grantor’s property in virtually any fashion (i.e.: open and close bank accounts/ maintain and sell house or vehicle/ pay bills/ collect debts/ deal with investments).
The only limitation in authority is that the Attorney cannot make a will on behalf of the grantor.
With this broad legal authority, however, comes several legal obligations and responsibilities for the Attorney. In administering the grantor’s property, the Attorney must act in relation to the said property as a fiduciary, whose powers and duties shall be performed diligently, competently, with honesty and integrity and in good faith for the grantor’s benefit.
Decisions made in relation to the grantor’s property must consider the grantor’s personal comfort and wellbeing.
An Attorney who does not receive monetary compensation for managing the grantor’s property must exercise a degree of care, diligence and skill that a personal of ordinary prudence would exercise in the conduct of his or her own affairs.
An Attorney who, however, receives monetary compensation for managing the said property must exercise a degree of care, diligence and skill that a person in the business of managing the property of others is required to exercise.
An Attorney can be liable at law for damages resulting as a breach of his or her duties.
The Attorney can be required to provide a financial accounting for the period of time the Attorney has administered the grantor’s property. The Attorney will be required, at law, to keep accurate accounts and to present the accounts in a specific, detailed format. The accounts must clearly show how all the monies or assets received have been disbursed.
By: Barrie M. Hayes, Partner