Power of Attorney for Property Compensation
Being an Attorney for Property can be a difficult and thankless job. As a result of the long hours which are often involved in managing an incapable person’s property, many Attorneys for Property will begin to ask themselves whether they are entitled to be paid compensation for their work. The answer to such a question is not straightforward, and will depend on each specific circumstance.
The first place to look to in determining whether an Attorney for Property is entitled to be paid compensation is the Power of Attorney document itself, and whether the document sets a specific framework regarding compensation. If the Power of Attorney document sets out a specific framework for compensation, the Attorney for Property may be paid compensation in accordance with what is provided in the document. If the Power of Attorney document specifically bars the Attorney for Property from being paid compensation, the Attorney for Property will be unable to charge compensation for their work.
Presuming that the Power of Attorney document is silent with re
spect to the issue of compensation, the compensation which the Attorney for Property may be entitled to be paid is set by the Substitute Decisions Act (the “SDA“). Section 40(1) of the SDA provides:
“A guardian of property or attorney under a continuing power of attorney may take annual compensation from the property in accordance with the prescribed fee scale.”
The “fee scale” contemplated by section 40(1) of the SDA is set out in Ontario Regulation 26/95, section 1 of which provides that an Attorney for Property shall be paid in accordance with the following guidelines:
- 3% on capital and income receipts;
- 3% on capital and income disbursements; and
- 3/5 of 1% (i.e. 0.6%) of the annual average value of the assets under administration as a “care and management fee”.
The amounts contemplated above are subject to reduction on a subsequent Application to Pass Accounts. To this effect, while the SDA does not require that an Application to Pass Accounts be commenced prior to the Attorney for Property being entitled to pay themselves compensation, the Attorney for Property should be prepared to later justify any amount taken in compensation on a later Application to Pass Accounts. In the event that on such a subsequent Application to Pass Accounts it is determined that the Attorney for Property has been overpaid for their work, they may be required to return any overpayment.