Tag: Powers of Attorney
Earlier this week, Ian Hull and I spoke at Osgoode Professional Development’s program on Powers of Attorney and Guardianship: Non-Contentious and Contentious Matters.
During the program, in addition to discussing new execution options for wills and powers of attorney, the panel shared its thoughts on a number of considerations relevant to the preparation of powers of attorney during the pandemic, including some of the following:
- It may now be impractical to permit for decisions regarding personal care or property to be made only jointly by two or more attorneys acting together where the attorneys selected are not members of the same household.
- In light of ongoing travel restrictions, it may be increasingly important that the selected attorney(s) for property and/or personal care are local.
- It may be more difficult to access multiple medical professionals (or a specified medical professional) to confirm incapacity during a healthcare crisis. The provision regarding the circumstances in which a power of attorney is to become effective should accommodate potentially limited access to a specified physician or more medical professionals than necessary.
- It may be more important than ever to ensure that the original power of attorney documents (and/or copies) are physically accessible to the named attorney(s).
- The current circumstances present a unique opportunity to assist clients in updating outdated plans and ensuring that powers of attorney are put into place for those who do not have them already.
Even outside of the context of a pandemic, considering practical issues like those set out above when creating or updating an incapacity plan is a worthwhile exercise and may expose potential problems with the plan before it is finalized.
Thank you for reading.
Other blog entries that may be of interest:
COVID-19 has prompted innovation and legislative updates in terms of the way that lawyers can assist our clients with estate and incapacity planning. A new tool created by a professor at my alma matter, Queen’s University, has recently emerged to supplement formal planning by making it easier for clients to create end-of-life treatment plans and to discuss their end-of-life wishes with their families and health care teams.
The Plan Well Guide is a free online tool that allows users to formulate a “Dear Doctor letter”, which can be provided to a physician for discussion and can be reviewed with family members (or otherwise an attorney or guardian of personal care) to ensure an understanding of the person’s wishes during a health crisis. The website also includes other information and resources relevant to end-of-life decision making.
I went through the process of creating an end-of-life plan using this resource and found it to be user-friendly and straightforward. Some highlights of the Plan Well Guide include the following:
- There are prompts that ask whether a user has a Power of Attorney for Personal Care and Will in place, which may act as a prompt to obtain a lawyer’s assistance if necessary.
- The website illustrates the user’s wishes, with examples to confirm the accuracy of the information that the user inputs. Where the illustration is not consistent with the user’s actual wishes, the user can go back to modify priorities to better reflect their wishes.
- Quizzes to ensure proper understanding of terms such as ICU treatment, comfort care, and the nature of resuscitation.
- There are prompts for both outstanding questions or issues for discussion with a healthcare provider and explanations of wishes to provide those reading the document with a better understanding of the user’s rationale behind their wishes.
Especially in the midst of the current pandemic, tools like this that make end-of-life planning more accessible, while having the potential to expose deficiencies in incapacity or estate planning and encouraging an open discussion of wishes in terms of medical treatment, can be helpful resources.
Thank you for reading.
Other blog posts that may be of interest:
Although the temporary emergency Order has only been in place for a few days, there is no question that lawyers have already begun to virtually witness the execution of wills and powers of attorney. A complimentary CPD program on the issue was put on by the Law Society of Ontario (LSO) last week, chaired by Ian Hull. A link to it is here. LawPRO has also provided a helpful commentary on the subject matter from the perspective of risk-avoidance here, and below I draw upon the points made that may help lawyers lessen their risk of a malpractice claim.
As much as lawyers may be focused on adhering to the requirements under the emergency Order, LawPRO reminds us that the most common cause of malpractice claims in the estates area is inadequate investigation – a failure to inquire about assets, prior wills and details about past and present marital and familial relationships. The second most common error is a communication failure – not ensuring consistency between the draft will and the instruction notes, and not ensuring that the solicitor and client each understand the other. So it is important to keep risk management tips here top of mind, particularly given that it may be more difficult to effectively communicate or ensure that clients understand documentation when conducting virtual client meetings.
As related specifically to virtual witnessing of wills and powers of attorney, LawPRO has various suggested steps to lessen the risk of a claim, which I comment on below.
- Comfort – Some clients may not be as ease with video technology and/or discussing personal matters through this medium. Take the time to establish that all participants are comfortable.
- Identification – As a result of Covid-19, the LSO is not requiring face-to-face meetings to identify or verify a client’s identity. Here you can find the LSO’s guidance on the issue, and LawPRO’s video conference checklist (accessible through the LawPRO link above) will help lawyers consider the steps needed before, during and after a video conference meeting.
- Capacity and undue influence – These known risks may be more difficult to assess through virtual communication, making it all the more important that certain precautions be taken, such as: (i) asking open questions, and follow up questions, (ii) asking questions to establish that the client is acting independently (e.g. explore relationships and reasoning in detail when marked changes are being made), (iii) when acting for one client, make sure the client is alone in the room (consider asking for a video pan of the room if you can’t clearly see it), and (iv) take notes reflecting consideration of capacity and undue influence, especially if there are any concerns. Here you can find a checklist WEL Partners has created for indicators of undue influence during video meetings, and the LSO has released a special comment on the issue here.
- No counterparts – You will need multiple virtual meetings so each witness can sign the original will or power of attorney. Video conference wills will also likely require a different affidavit of execution, and here you can find our recent blog that provides sample affidavits of execution.
- Document your work – Particular scrutiny may be given to documents executed during this health crisis. Taking detailed notes or recording the meeting (with client consent) will document what occurred, and reporting to the client thereafter will serve to confirm your instructions.
- After the emergency – Although not required, once it is safe to do so consider recommending that your clients re-execute their testamentary documents in the physical presence of witnesses.
To help mitigate the risk of a claim, Hull eState Planner has created checklists for executing wills and powers of attorney by video. The will execution by video checklist can be found here and the powers of attorney execution by video checklist can be found here.
The Covid-19 situation is creating rapid change, and at Hull & Hull LLP we are monitoring things on a daily basis. I encourage you to continue to access our website for further updates. Our resource page can be found here.
Thanks for reading and have a great day,
Since the Supreme Court of Canada’s landmark decision in Carter v Canada (Attorney General) and the subsequent decriminalization of medical assistance in dying (“MAID”) in 2016, there has been considerable debate regarding the accessibility of MAID.
Currently, MAID is available only to individuals able to satisfy the following test (set out in the Criminal Code):
- they are eligible — or, but for any applicable minimum period of residence or waiting period, would be eligible — for health services funded by a government in Canada;
- they are at least 18 years of age and capable of making decisions with respect to their health;
- they have a grievous and irremediable medical condition;
- they have made a voluntary request for medical assistance in dying that, in particular, was not made as a result of external pressure; and
- they give informed consent to receive medical assistance in dying after having been informed of the means that are available to relieve their suffering, including palliative care.
The criteria do not feature any mechanism for providing advance consent to MAID. Similarly, an attorney or guardian of personal care cannot consent on behalf of the patient at the time of the procedure, once he or she loses the capacity to consent him or herself.
As it currently stands, an individual who qualifies for MAID must consent at the time of the procedure, before he or she may suffer from diminished mental capacity that compromises the patient’s ability to provide informed consent. In some cases, this has resulted in individuals accessing MAID before they otherwise may have chosen to do so to ensure that they would not be exposed to prolonged suffering during a subsequent period of incapacity, during which MAID would not longer be accessible.
Some individuals and groups, including Dying with Dignity Canada, argue that the laws regarding MAID should be amended to provide for the option of providing advanced requests for MAID.
According to a recent Toronto Star article (“No rush to change assisted-death law”, published on February 17, 2019), Justice Minister David Lametti has stated that MAID laws will not be updated in advance of a five-year parliamentary review in 2021 of how the current MAID regime is operating. At that time, it will no doubt be difficult in considering any changes to balance the rights of those with grievous and irremediable medical conditions to die with dignity on one hand, and the protection of individuals who are vulnerable and whose capable wishes can no longer be confirmed on the other.
Thank you for reading.
Other blog entries that may be of interest:
For the many who take on the fiduciary role of an attorney for property, there is often little or no education received on one’s duties and obligations. The sole guidance often provided is from the language of the power of attorney document itself. It is rare, I would expect, that an attorney seeks out independent legal advice on the issue, which may in part be why we see so many cases in our practice where attorney spending is challenged. This blog serves as a refresher on the issue.
The legislation (Section 37(1) of the Substitute Decisions Act (“SDA”)) provides that a guardian or attorney for property must make certain expenditures out of the assets of the incapable person, listed in priority as being:
- Expenditures reasonably necessary for the person’s support, education and care.
- Expenditures reasonably necessary for the support, education and care of the person’s dependants (“dependant” is defined as a person to whom the incapable person has an obligation to provide support).
- Expenditures that are necessary to satisfy the person’s other legal obligations.
The expenditures may only be made if the assets of the incapable person are sufficient to satisfy them. The guiding principles are that the value of the property, the accustomed standard of living of the incapable person and his or her dependants and the nature of other legal obligations are to be taken into account.
An attorney may make gifts or loans to the person’s friends and relatives, and may make gifts to charities (Section 37(3) of the SDA). The policy guidelines include:
- Gifts or loans may be made only if there is reason to believe, based on the intentions expressed prior to becoming incapable, that he/she would have made these gifts if capable.
- Charitable gifts may be made only if, (i) the incapable person authorized the making of charitable gifts in the power of attorney document, or (ii) there is evidence that the person made similar expenditures when capable.
- The gift shall not be made if the incapable person expresses a wish to the contrary.
- The SDA sets limits on the quantum of charitable gifts.
With these parameters in mind, coupled with carefully documenting all expenditures and retaining supporting vouchers, an attorney for property can hope to have a smoother ride when satisfying accounting obligations in respect of the administration.
Thanks for reading and have a great day,
Natalia R. Angelini
Some other blog posts that might interest you are:
Previously on our blog and podcast, we discussed Tarantino v. Galvano, 2017 ONSC 3535 (S.C.J.) in the context of the counterclaim for quantum meruit and the costs decision of the Hon. Justice Kristjanson.
Tarantino v. Galvano arose from a lawsuit that was commenced by two out of three Estate Trustees against the third Estate Trustee, Nellie, with respect to her actions as attorney for property for the Deceased, Rosa (i.e. Nellie’s actions while the Deceased was still alive but incapable of managing her own property).
Rosa had two daughters, Nellie and Giuseppina. Giuseppina died before Rosa. Guiseppina’s daughters were the other two Estate Trustees and they are beneficiaries of the Rosa’s Estate along with Nellie. For the better part of her life, Nellie lived with Rosa. She took care of her mother after her father’s death. Nellie and her son were also Rosa’s caregivers as Rosa’s health declined until Rosa’s death in 2012.
Rosa and Nellie owned the home that they lived in together. Rosa held an 80.3% interest and Nellie held an 19.62% interest. Pursuant to Rosa’s 2005 Will, Nellie had a right of first refusal to purchase the home from Rosa’s Estate. In 2008, on the advice of counsel while Rosa was incapable, Nellie entered into an agreement between herself and Rosa. The agreement provided for a transfer of Rosa’s interest in the home and 75% of Rosa’s pension income to Nellie in exchange for Nellie’s caregiving services. The agreement was in writing and it was signed by Nellie. Nellie signed for herself and for Rosa, in her capacity as Rosa’s attorney for property.
Even though the Court found that Nellie was a good daughter who held up her end of the bargain by caring for Rosa, the agreement was set aside because it was a self-dealing transaction that did not meet the requirements of the Substitute Decisions Act, 1992:
“ Under the Substitute Decisions Act, Nellie could only enter into the agreement to transfer the house and pension income if it was “reasonably necessary” to provide for Rosa’s care, which I find it was not. As a fiduciary, an attorney for property is “obliged to act only for the benefit of [the donor], putting her own interests aside”: Richardson Estate v. Mew, 2009 ONCA 403 (CanLII), 96 O.R. (3d) 65, at para. 49. An attorney is prohibited from using the power for their own benefit unless “it is done with the full knowledge and consent of the donor”: Richardson Estate, at paras. 49-50. Rosa lacked capacity at the time of the Agreement, and the transfer of the house and pension income therefore were not done with Rosa’s full knowledge and consent.”
The “reasonably necessary” test was assessed, as of the time of the transfer, rather than from hindsight and it was determined that the decision to transfer 80.3% of a home and 80% of Rosa’s pension income at the outset of care was “an imprudent agreement which benefitted Nellie beyond that ‘reasonably necessary’ to provide adequately for Rosa’s care” (see paragraphs 34-49 for the Court’s analysis of this issue).
As a set off, Nellie’s quantum meruit claim was successful and you can click here for Ian Hull and Noah Weisberg’s podcast on this particular issue. While there was blended success to all parties involved, none of the three Estate Trustees were entitled to indemnification. Our discussion of the denial of costs can be found here and the Endorsement can be found here.
Thanks for reading!
A “power” is an authority to act, whereas a “duty” is an obligation. A duty of an estate trustee compels her to act, or prohibits her from acting in certain situations. A power, on the other hand, allows her to act in a certain way, subject to her discretion.
An estate trustee faces potential personal liability from unauthorized actions in the administration of an estate. Although, generally a will prescribes specific powers and duties for an estate trustee when it comes to the administration of the estate, there may also be a situation which the will simply does not contemplate.
As an estate trustee, or even as a beneficiary under such a will, how does one assess what an estate trustee can and cannot do?
The Trustee Act, RSO 1990, c. T23, as amended, is helpful in determining what an estate trustee’s powers and duties are, in the absence of a clear direction from a will.
It is not unusual for an estate trustee to be given discretion with respect to the exercise of administrative powers conferred to manage the estate. However, she may also be given the authority to allocate estate property to the beneficiaries. That kind of power is referred to as dispositive power or discretion and may require an estate trustee to do such things as, divide income and/or capital between beneficiaries at a time of her choosing.
Generally, the powers of an estate trustee will depend on the specific nature of the estate. For example, if the estate consists of property that is to be administered as an investment, the estate trustee will likely be allowed a power of sale, a power to mortgage, and a power to lease. The estate trustee must have the power to keep the property intact as well as meet all financial claims of third parties. An estate trustee will also generally have the power to insure any real property, against loss or damage.
With respect to expenses related to the estate, the estate trustee who believes that an expense is properly incurred, may either pay for it directly from the estate property or pay for the expense personally and later recover the corresponding amount. It is important to note, however, that a court may later disallow an expense if it concludes that it was not properly incurred.
In exercising each power that the estate trustee might have, she must keep in mind that there are certain duties that limit her powers.
- If a power of sale is to be exercised, she cannot delegate it to a third party and later escape responsibility in the event that there is an issue, on the ground that she did not choose the purchaser.
- An estate trustee cannot sell a property to herself, a beneficiary, or a third party with the agreement that she will then re-purchase the said property.
- If the estate trustee sells the trust property, not only must she be honest, but also show a reasonable level of care and skill in her conduct, throughout the transaction. For example, she should not convey title until payment is received, and if she does do so and there is a resulting loss to the estate, there may be personal liability.
An estate trustee with significant discretion in administering the estate can certainly be put in a difficult position with respect to how such discretion is to be exercised. Unfortunately, there are few guidelines available on that end, short of exercising one’s own good sense.
Thanks for reading.
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Estate Trustees’ Standard of Care
This week on Hull on Estates, Jonathon Kappy and Stuart Clark discuss the powers entrusted to a Power of Attorney for Property, including whether they may give gifts on behalf of an incapable person.
Our population is aging but living longer. This has resulted in an increase in the prevalence of dementia and other aging-related conditions associated with cognitive decline, and a corresponding increase in the use and activation of powers of attorney.
As estate litigators, our firm is beginning to see a rise in power of attorney disputes between siblings and other family members. These types of disputes are often emotionally fuelled by longstanding sibling rivalry or distrust among family members, and can result protracted litigation and expensive legal bills.
Often a sibling or other family member will have concerns that the appointed attorney is acting improperly or is failing to fulfill his or her duties. In these circumstances, the sibling or family member may have concerns with respect to a lack of transparency or feel that they are being left out of the decision-making process.
It is useful for these individuals to know that the Substitute Decisions Act, 1992 (the “SDA”) imposes certain obligations upon an attorney, which may assist in addressing these concerns.
The SDA states that an attorney has a duty to consult with family members and keep them informed as to the incapable person’s health and wellbeing (ss. 32(5)) and that an attorney has a duty to foster personal contact between the incapable and his or her supportive family members (ss. 32(4)).
The SDA also states that an attorney has a duty to keep proper records and to provide updates regarding the incapable person’s financial circumstances (ss. 32(6)).
The SDA also states that an appointed attorney must also obtain and review a copy of the incapable person’s Will (s. 33.1). If the Will provides that a specific item of property is to be given to a particular beneficiary, the attorney must retain that property for that beneficiary unless it is essential to sell the item in order to satisfy the incapable person’s legal responsibilities or otherwise provide for the incapable person (ss. 35.1(1)).
These duties are ongoing and an attorney can generally be held personally liable for any damages that results from a breach of his or her duties.
The Office of the Public Guardian and Trustee has published a brochure that outlines the duties and powers of an appointed attorney for property in greater detail, which can be viewed here.
Communication is often the key to resolving these types of disputes between family members. However, where there is a breakdown in communication, the assistance of a litigator or mediator who specializes in this practice area is often helpful.
Thank you for reading.
I recently read an article by Gregory Wilcox and Rachel Koff, which was published in the fall 2015 edition of the Journal for the National Academy of Elder Law Attorneys, that explores the use of genetic testing and counselling within the context of elder law.
The article describes the three uses of genetic testing as disease diagnosis, determining carrier status, and predictive testing. Historically, genetic counsellors were required to rely upon basic Mendelian genetics that did not often reveal whether someone would eventually suffer from a certain delayed-onset disease. Because of recent developments, however, science now allows accuracy in determining whether a person will suffer (or be more likely to suffer) from a variety of medical conditions. For example, the development of breast and ovarian cancer has been linked to the BRCA1 gene mutation, which can be tested for and discovered in time for adjuvant medical intervention.
Genetic testing is now capable of revealing whether a person may be especially susceptible to conditions that are often associated with aging, including Alzheimer’s disease, Parkinson’s disease, diabetes, and cancer. However, to date, there is limited data confirming that individuals who are determined to be at a higher risk of developing a disease like Alzheimer’s actually do receive an eventual diagnosis at higher rates than the general population. As a result of learning that one is at a higher-than-average risk of developing such a condition, lifestyle changes may be made in an effort to reduce the chances that an increased genetic risk is eventually expressed through the onset of the disease.
Perceived risk of developing a disease that may compromise mental capacity or shorten life expectancy may serve as motivation to obtain assistance in creating comprehensive incapacity and estate plans at an earlier life stage than these considerations might otherwise be made. As the year ends, no matter current health status or perceived risk of developing certain diseases in the future, it is important to take the time to ensure that incapacity and estate plans are put into place and to keep those plans updated following any material change in family situation.
Happy New Year!