Can an Attorney Pay Themselves Under a BC Power of Attorney?

Managing someone else's finances takes time and money. Attorneys often ask whether they can pay themselves, and relatives sometimes worry that an attorney is doing exactly that.

British Columbia's Power of Attorney Act separates three things: payment for the work, reimbursement of expenses, and gifts or loans. This article explains each. It is general information only.

This article covers the law of British Columbia.

Payment for acting as attorney

An enduring power of attorney names an attorney to make decisions about the adult's financial affairs, and the adult can choose to give the attorney either general powers or only specific ones. Personal care and health care decisions are made through representation agreements and advance directives instead.

An attorney must not be paid for acting unless the enduring power of attorney expressly authorizes payment and sets the amount or rate. If the document is silent, the attorney is not entitled to pay.

Taking money without that authority is a serious concern and may lead to a report or court action.

Whether a particular document covers payment depends on its exact wording, so it is worth having it read carefully by a lawyer if you are unsure.

Reimbursement of expenses

Reimbursement is different from payment. An attorney may be reimbursed from the adult's property for reasonable expenses properly incurred while acting as attorney.

Because attorneys must keep accounts, invoices, bank statements and other records needed for full accounts, expense claims should be backed by paperwork.

The required records also include a list of the adult's property and liabilities, kept current with value estimates where reasonable, and accounts of what the attorney does.

Generally, an attorney cannot delegate their decision-making authority, although investment functions may be delegated to a suitably qualified person as the applicable statute allows. Whether the cost of outside help can be charged to the adult depends on the facts and is worth confirming with a lawyer or accountant.

Gifts and loans, including to the attorney

An attorney may make a gift, loan or charitable gift from the adult's property if the document permits it. If it does not, all three of these conditions must be met:

• The adult will still have enough property for their personal care and health care needs.
• The adult made gifts or loans of that kind when capable.
• The total for the year is within the prescribed limit.

When the document does not authorize gifts, all gifts, loans and charitable gifts in a year cannot total more than the lesser of 10% of the adult's taxable income for the previous year and $5 000.

The attorney must also act in the adult's best interests and keep the adult's property separate from their own. Joint property is an exception to the separation rule unless the document says otherwise.

Other limits on an attorney's powers

Payment, expenses and gifts are not the only areas where the law sets limits. An attorney's decisions are shaped by several other rules.

• An attorney must not make or change a will for the adult, and any will or change made by an attorney has no force or effect.
• An attorney must not dispose of property the attorney knows is the subject of a specific gift in the adult's will, and where reasonable must keep the adult's personal effects available to the adult.
• An attorney may change a beneficiary designation the adult made in a document other than a will only if the BC Supreme Court authorizes the change. The exceptions are a new designation that renews or replaces a similar one the adult made while capable and names the same beneficiary, or a new instrument that names the adult's estate.
• The attorney must invest the adult's property under the Trustee Act unless the document says otherwise.
• If two or more attorneys are named, they must act unanimously unless the document says otherwise.

Acts done before an attorney's authority ends stay valid. If an attorney acts improperly, the act still binds the adult toward people who do not know, and have no reason to believe, that it is improper.

An attorney's authority ends automatically in several situations, including resignation, death, bankruptcy, or termination of the document. An attorney who is the adult's spouse loses their authority when the marriage or marriage-like relationship ends, unless the document provides otherwise. The enduring power of attorney also terminates when the adult dies.

If you are worried about an attorney

Anyone with reason to believe an attorney is abusing the adult or failing to follow their duties may report to the Public Guardian and Trustee. Deliberate mistreatment that causes financial harm is included in abuse under the Adult Guardianship Act, and a designated agency may investigate. If a criminal offence is suspected, the agency must report the facts to the police.

The Public Guardian and Trustee must promptly review a report and may investigate whether it is valid, and it may also investigate without a report. No action for damages lies against a person who makes a report, unless they acted falsely and maliciously.

The Public Guardian and Trustee, or a person who reported, may apply to the BC Supreme Court, which can terminate all or part of the enduring power of attorney. An attorney who is unsure about the scope of their powers or duties may also apply to the court for directions.

What to do next

• Read the document for any clause on payment, gifts or loans.
• Keep every receipt and a record of each transaction.
• If you are the attorney, get advice before paying yourself or accepting a gift.
• If you are a relative, ask to see the accounts if you are entitled to, and note the dates and amounts that concern you.
• Consider a report to the Public Guardian and Trustee, and speak to a lawyer about next steps.

Frequently asked questions