Can an Attorney Under a Power of Attorney Be Paid in Ontario?

If you have been named as attorney under a power of attorney for property, you may be giving real time to a parent's or relative's finances. It is natural to ask whether you can be paid for that work, and if so, how much. If you are another family member watching the money, you may be asking the same question from the other side.

Ontario has a set fee scale for attorneys under a continuing power of attorney, and there are ways to have what an attorney has taken reviewed. This article explains the scale, the duties that go with it, and the routes open if someone is concerned. It does not cover making a power of attorney.

When an attorney's authority starts

Compensation only matters once the attorney is actually acting. An attorney under a property power of attorney can start making financial decisions immediately unless the document says otherwise. Some documents are written differently, so the wording of the document itself is the first thing to read.

• A continuing power of attorney may say that it takes effect on a set date or when a specified event happens.
• If it takes effect when the grantor becomes incapable but gives no way to decide that, it takes effect when the attorney is notified in the prescribed form by an assessor that the grantor is incapable, or that a certificate of incapacity has been issued.
• A power of attorney is called continuing if it says the authority can be used during the grantor's incapacity to manage property.

What the fee scale allows

Under O. Reg. 26/95, an attorney under a continuing power of attorney may take compensation made up of three parts. The percentages are applied separately and are not a single flat rate.

These amounts can be adjusted when the accounts are passed. The court may order an attorney to pass all or part of their accounts, so how the scale applies in a particular case is worth confirming with a lawyer.

Duties that come with the pay

Being paid does not stand apart from the job. When the grantor is incapable, the guardian's duties apply to an attorney under a continuing power of attorney. They include:

• acting as a fiduciary, diligently, honestly and in good faith
• keeping accounts
• liability for damages for a breach of duty

Good records are the practical answer to nearly every later question. Keep a clear record of every amount received and paid out, and of every payment you take for yourself, with the date and the reason.

How the attorney's accounts and fees can be reviewed

The court may order an attorney to pass all or part of their accounts. Passing accounts means putting the record before a judge, who can look at what was done and what was taken. The attorney, the grantor, the persons listed in s. 42(4) (including a dependant of the grantor and the Public Guardian and Trustee), or others with the court's leave may apply.

If the concern is bigger than fees, the court may appoint a guardian of property for an incapable person on anyone's application, and that appointment ends a continuing power of attorney.

There is also a route through the Office of the Public Guardian and Trustee. It must investigate any allegation that a person is incapable of managing property and that serious adverse effects are occurring or may occur. Serious adverse effects include the loss of a significant part of the person's property, and the investigations line is 1-800-891-0504. The office may investigate only if no alternative solution can be found, and it has no authority to make decisions for the person during an investigation or while the matter is before the courts.

Applying the scale and what to do next

To see how the scale works on a real file, the attorney would work out three separate figures: the capital and income received, the capital and income paid out, and the annual average value of the assets. The 3 per cent rate applies to receipts, the 3 per cent rate applies to disbursements, and three-fifths of 1 per cent of the annual average asset value makes up the care and management fee.

• Receipts part: 3 per cent of capital and income receipts.
• Disbursements part: 3 per cent of capital and income disbursements.
• Care and management part: three-fifths of 1 per cent of the annual average value of the assets.

Each part is worked out on its own base, and the amounts can be adjusted when accounts are passed. What counts as receipts, disbursements and average asset value in a real file can be contested, so the figures need care, and it is worth confirming with a lawyer or accountant.

• Read the power of attorney to confirm when it took effect and whether it says anything about payment.
• Keep dated records of every receipt, payment and any amount you take for your own time.
• Keep the grantor's money and your own money entirely separate.
• If you are a worried relative, ask for an account of the finances in writing before escalating.
• If concerns remain, speak with a lawyer about an application to pass accounts, or contact the Public Guardian and Trustee investigations line.

Frequently asked questions