Navigating Powers of Attorney for Property: A Legal and Financial Perspective

In an era where an increasing number of Canadians require assistance in managing their financial affairs due to aging or other factors, understanding the nuances of a Power of Attorney (PoA) for property becomes crucial. At Shajani CPA, with our expertise in tax, accounting, and law, including Master’s and Bachelor’s degrees in Law and Trust and Estate Practitioner (TEP) designation, we offer comprehensive guidance and support in this domain.

The Essence of Power of Attorney for Property:

What is a PoA for Property? A Power of Attorney for property is a legal document wherein an individual (the grantor) appoints another person (the attorney) to manage their financial affairs. This appointment enables the attorney to act as a substitute decision-maker for the grantor’s property and financial matters.

Types of PoA: There are generally two types:

General PoA: This grants broad authority to the attorney, allowing them to perform any act the grantor can legally do. It becomes effective immediately and does not require the grantor’s incapacity.

Springing PoA: This type becomes effective upon the occurrence of a specified condition, typically the mental incapacity of the grantor.

Critical Aspects of PoA:

Understanding and Extent of Authority: It’s vital for the grantor to comprehend the nature and scope of their property and financial affairs, as well as the powers being granted. The attorney, once appointed, will have complete control over the grantor’s financial matters, continuing even if the grantor becomes mentally incapable. In such instances, the PoA becomes irrevocable.

Limitations and Termination: The PoA ceases upon the grantor’s death, bankruptcy, or mental incapacity and is confined solely to financial matters. The grantor retains the right to revoke this power at any time, provided they have the requisite capacity.

Fiduciary Duty of the Attorney: The appointed attorney is bound by a fiduciary duty, which includes the obligation to account for their actions.

The Duty to Account:

Accounting Requirements: The attorney must maintain meticulous records of all transactions from the commencement of their role. They must be ready to account for every transaction and be prepared to formally “pass accounts” before a court if necessary.

Shajani CPA Support Services: Recognizing the complexity and significance of these responsibilities, we at Shajani CPA offer specialized services to assist attorneys in fulfilling their duty to account. This includes annual accounting support for those acting under a Power of Attorney.

Conclusion: Handling a Power of Attorney for property requires not only a deep understanding of legal intricacies but also meticulous financial management. At Shajani CPA, our blend of legal and accounting expertise uniquely positions us to assist both grantors and attorneys in navigating these responsibilities effectively. Whether it’s establishing a PoA, understanding its implications, or managing the associated accounting duties, our team is equipped to provide the necessary guidance and

This information is for discussion purposes only and should not be considered professional advice. There is no guarantee or warrant of information on this site and it should be noted that rules and laws change regularly. You should consult a professional before considering implementing or taking any action based on information on this site. Call our team for a consultation before taking any action. ©2023 Shajani CPA.

Shajani CPA is a CPA Calgary, Edmonton and Red Deer firm and provides Accountant, Bookkeeping, Tax Advice and Tax Planning services.