The Powers of Attorney Act was amended in April of 2022, introducing new rules for Attorneys to follow when they begin to act on behalf of someone. Almost two years later, many Attorneys are still not aware of the new rules. This article outlines the new obligations under the Act. Older Power of Attorney documents are still valid under the new rules but may need revising. In most cases, the new rules will apply, even to old Power of Attorney documents.
Key Words:
Before delving into the main rules around acting as an Attorney, here are a few key terms:
Donor – If you are an Attorney, the “Donor” is the person appointing you.
Attorney – If you have been authorized by another person, through a document called a Power of Attorney, to make decisions about their money and property, then you are the “Attorney”.
Power of Attorney – A “Power of Attorney” is a legal document where the Donor gives their Attorney the power to handle their money and property decisions.
Capacity – If a person can make their own informed decisions around the management of their property and finances, they have “Capacity”. If they can’t make their own informed decisions around managing their property and finances, they likely do not have “Capacity”.
Enduring Power of Attorney – An “Enduring Power of Attorney” grants the Attorney the authority to act even after the Donor has lost Capacity. It’s crucial to know the specific type of Power of Attorney document you possess, as certain documents may not permit the Attorney to continue acting when the Donor has lost Capacity.
Monitor – A “Monitor” is a person who may be appointed in the Power of Attorney document to supervise and monitor the conduct of an Attorney.
Top 10 Rules for Attorneys
- Guiding Principles: Attorneys must act according to the Donor’s directions, in the Donor’s best interests, in good faith, and avoid conflicts of interest or acting for their personal benefit without consent. They must also not interfere unreasonably with the Donor’s personal contact with other people.
- Notification Requirements: Attorneys must notify specific parties in writing when they begin to act, depending on whether the Donor has Capacity. This includes the Donor, any appointed Monitors, and other named individuals in the Power of Attorney document.
- Decision Making for Donors Without Capacity: Attorneys should consult the Donor when reasonable and make decisions based on relevant instructions, the Donor’s current wishes, or what the Attorney believes to be in the Donor’s best interests.
- Record Keeping: Attorneys must maintain detailed records of assets, liabilities, transactions, income tax documents, receipts, and other financial and legal documents related to the Donor’s estate, including what they have paid out on behalf of the Donor and why.
- Accounting: Attorneys may be asked to provide an accounting of the Donor’s assets and liabilities at various points during their appointment by a Monitor, the Donor, or a family member of the Donor.
- Mixed Monies: Attorneys must keep their personal assets separate from the Donor’s and not mix them unless authorized. This includes money in bank accounts.
- Respect for Donor’s Estate Plan: Attorneys must not dispose of assets included in the Donor’s estate plan unless necessary to fulfil their duties.
- Gifts: Attorneys cannot give gifts from the Donor’s assets without the Donor’s authorization.
- Delegation: Attorneys cannot delegate their authority unless permitted in the Power of Attorney document.
- Resignation: Attorneys may resign by notifying the Donor and other specified parties in writing, with different procedures depending on the Donor’s Capacity.
Specific legal advice may be necessary, particularly regarding the Power of Attorney document itself and your individual circumstances.
Alexander Silvester is an Associate at Kennedy Schofield Lutz Lawyers. This article is meant to offer basic legal information and should not be relied upon for legal opinion. You can contact Alexander or any of our lawyers at 902-826-9140 for advice on your specific matter.
