Powers of Attorney, whether for personal care or property, are becoming increasingly popular as the population ages and assets are becoming more complex to manage. What many attorneys may not realize, however, is their entitlement to compensation, or that they are still eligible to seek compensation after resigning as an attorney. 

In Ontario, Powers of Attorney (“POAs”) are governed by the Substitute Decisions Act. A person can be named an attorney for property (for financial matters) or personal care (for health care decisions), or both. The POA can be designed to apply to only a specific task, such as selling a house, or for a discreet period, such as during international travel. The POA can take effect as soon as it is executed, or upon the happening of a specific event. Regardless of the nature of the POA, the attorney is entitled to compensation, unless the POA document provides otherwise. 

A POA can be drafted to limit or specify the compensation of the attorney, but generally these documents are silent on compensation, meaning the provincial fee scale will apply. The fee scale for an attorney for property is currently:

• 3% of capital and income receipts;
• 3% of capital and income disbursements; and
• 0.6% of the annual average value of the assets.

Attorneys should be aware that, while a fee scale exists, a court has discretion to increase or decrease that amount. 

Notably, even if it has been a long time since the person acted as attorney, they may be able to receive compensation despite the general limitation period. In the case of Armitage v The Salvation Army, the Court of Appeal held that the two-year limitation period “does not apply because compensation for an attorney for property through the passing of accounts process does not constitute a “claim” within the meaning of the Limitations Act, 2002.”

Although there is no fee scale for an attorney for personal care, the attorney may request compensation from an attorney for property, if reasonable in the circumstances. 

Finally, it bears reminding clients that compensation received as an attorney is considered taxable income by the Canada Revenue Agency and should be reported. This may be true even if the client received the payment under an order or judgment.

Thanks for reading,

Ian Hull & Marie Kazmer