This series of posts will cover issues that people face when considering powers of attorney. A power of attorney is the
document by which a person (the grantor) appoints someone else (the attorney) to act on their behalf. The series
raises questions and makes suggestions that people should discuss within their families and with their lawyers.
1. Naming the Attorney
The attorney should act with the grantor’s best interests in mind. However, many things can go wrong with a power of attorney. For this reason, it is important for the grantor to carefully consider who the grantor names as the attorney.
The best recommendation is to name somebody that deserves your trust. This might be a loved one, a close friend, or a professional that you know. Here are some other tips to reduce risk when naming an attorney:
- Appoint an institutional attorney, such as a trust company. This may be expensive and bureaucratic, but usually you get what you pay for. A trust company is certainly accountable. If something goes wrong, it can be made to repay the damage done. This is not the case with individuals, who may take assets and leave the jurisdiction.
- Consider having more than one person act, together jointly. This way, it takes more than one person to commit the abuse.
- Another consideration is to give oversight authority to a lawyer, accountant or other trusted professional. While a loved one or personal friend may be the attorney, there is a second set of eyes. For example, the attorney could be required to submit accounts to the accountant who does the taxes each year for the grantor. The lawyer who drafted the will and power of attorney could also play this role.
- Where the grantor has not lost the capacity to manage affairs, the attorney should be made to account to the grantor for activities undertaken while exercising the power.
These are all ways to reduce the risk of abuse by an attorney. However, as with all risk reduction measures, they cannot provide a guarantee.
The Estate Law Group at McBride Bond Christian LLP
This is not legal advice. Please consult a lawyer before acting on any of the above comments.