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It is an obligation of the attorney for property to find and read the grantor’s will so as to ensure that assets specifically given in the will are not inadvertently liquidated or the grantor’s estate plan destroyed. The attorney is prohibited by the Substitute Decisions Act (SDA) from disposing of property specifically given in the will, unless a sale is required to support the grantor or the property can be given to the intended beneficiary within the terms of the guiding principles for gifts or loans. Should the attorney sell such property, the beneficiary would have a claim upon the death of the grantor to the proceeds of disposition without interest and the doctrine of ademption will not be applicable. Should the residue of the estate be insufficient, a pro rata sharing would be made.  A contrary intention given in the grantor’s will could override this rule.

Accounting responsibilities

The relationship between the grantor and the attorney under a power of attorney is fiduciary. According to common law, the attorney is duty bound to account to the grantor. As long as the grantor is capable, he or she would be expected to monitor the activities of the attorney with respect to financial matters. If the grantor becomes incapable, the SDA says that the attorney must exercise and perform his or her powers and duties diligently, with honesty and integrity, and in good faith for the incapable person’s benefit. While making decisions, the personal comfort and well being of the grantor are to be taken into account. It is the duty of the attorney to encourage the incapable person to participate, to the best of his or her abilities, in the guardian’s decisions about the property. In addition, the attorney is required to consult with the grantor’s supportive family members and friends who are in regular personal contact with the grantor and with the grantor’s caregivers.

Personal care

In order to make decisions for the grantor respecting the grantor’s “personal cares”, a power of attorney for personal care engages a person or persons for this purpose. In such instances, the term “personal care” encompasses health care, nutrition, shelter, clothing, hygiene, and safety. To address any one or more of these elements of personal care, the power of attorney for personal care is used.

In regards to health care, the applicable companion statute is the Health Care Consent Act ( HCCA), enumerating the hierarchy  of substitute decision-makers who can give or withhold consent to a “treatment”. Whoever is appointed as an attorney under a power of attorney for personal care will, subject to any conditions or restrictions contained in the document, place the attorney ahead of all of the grantor’s relatives for purposes of giving or withholding consent to a treatment. The powers of attorney for personal care take effect when the HCCA applies to the decision and authorizes the attorney to decide, or when the HCCA does not apply and the attorney has reasonable grounds to believe the grantor is incapable of making the decision, subject to such limitations as the document itself might specify.

Combined powers for both personal care and for property

Even though there is no statutory prohibition, it is not quite prudent to draft combined forms of powers of attorney for personal care and continuing powers of attorney for property, despite the fact that the same decision makers may be under consideration. The judging factors for incapacity of the grantor for property management and personal care are different. It is for this reason, the grantor’s particular state of mental capacity may result in the document’s being partially effective and partially ineffective. Then, the third parties to whom each document is to be given as proof of authority being different, the grantor may have reservations about disclosing particular medical directives contained in a personal care power of attorney to banks, trust companies, brokers, etc. who require evidence of financial authority only.

Practice issues

It is obligatory for the solicitor who takes instructions for powers of attorney to assess the capacity of the grantor to give this authority and determine that the grantor meets the conditions given in the SDA. A personal meeting with the grantor is, therefore, a must to discuss assets, family, obligations, medical history and so on. There is no question of an imposition, and free consent of the parties to the relationship is an essential factor. There should not be even a whiff of fraud, duress, misrepresentation, or mistake in the grantor’s authorization and engagement of the attorney. It is for the solicitor to ensure that the witnesses to the document do not fall under the prohibited class. A decision regarding the number of copies of each type of document to be signed is to be taken early on. Whether the documents will be held in safekeeping by a trusted third party or given out to the attorney immediately upon execution should also be thought of. One or two signed original powers of attorney of property would perhaps be needed for each piece of real estate held by the grantor, depending on the location and registration system that applies, and a copy may be needed for each institution with transfer authority over assets.

It is likely that the client would wish to give one signed original power of attorney for personal care to each attorney so that the attorney would have the document at hand in the event of a medical emergency. It is not uncommon for family physicians to keep a personal care power of attorney with the grantor’s medical records.

Deciding how to draft a Power of Attorney for Personal Care, how many copies to make, who to give them to and how to make sure you are not taken advantage of is best discussed with the lawyers at Levy Zavet PC.