Tag: section 42

26 Apr

“Pre-taking” Compensation by Property Guardians: Plan Ahead

Hull & Hull LLP Estate & Trust, Guardianship, Power of Attorney Tags: , , , , , , , , , , 0 Comments

Trustees often run into difficulties when they pay themselves compensation prior to passing their accounts.  They are said to have "pre-taken" compensation, meaning having paid themselves compensation prior to passing their accounts.  Fortunately for guardians of property (and attorneys), section 40 of Ontario’s Substitute Decisions Act allows guardians to pay themselves compensation at intervals during the guardianship before passing their accounts:

40.  (1)  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.

(2)  The compensation may be taken monthly, quarterly or annually.

Amounts taken monthly or quarterly could be divisions of a calculated "annual" amount, but this provision contains no element requiring equal divisions.  Regardless of how the property guardian takes compensation, any payment is subject to court approval.  Clients applying for guardianship should always be advised specifically of this point: if the court later disagrees with the compensation taken, the guardian may have to repay such amounts.  This holds true even where the Management Plan pursuant to which the guardian is managing the incapable person’s property authorizes the compensation the guardian has taken.

This raises another important consideration for lawyers in the application for guardianship stage.  Any compensation taken, or claimed later on a passing of accounts, should not be inconsistent with the provisions of the Management Plan.  Because the right to compensation is statutory, as are the prescribed percentages (though subject to discretionary reduction by the court), there is no need to declare an intention to take compensation in the Management Plan.  But if the Management Plan contains a provision disclaiming compensation, for instance, no compensation should be taken during the guardianship.

Have a great day,

Christopher M.B. Graham – Click here for more information on Chris Graham.

 

03 Jun

Accounting Under the Powers of Attorney – Hull on Estates #113

Hull & Hull LLP Hull on Estates, Passing of Accounts, Podcasts, Power of Attorney Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , 0 Comments

Listen to Accounting Under the Powers of Attorney

This week on Hull on Estates, Diane and Paul discuss accounting under the powers or attorney, the duty to account after the guarantor has passed away and the De Zorzi Estate v. Read case (2008, O.J. No. 944).

Comments? Send us an email at hull.lawyers@gmail.com, call us on the comment line at 206-350-6636, or leave us a comment on the Hull on Estates blog.

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19 Feb

Accounting Procedure Available Under the Substitute Decisions Act – Hull on Estates #98

Hull & Hull LLP Capacity, Hull on Estates, Litigation, Passing of Accounts, Podcasts Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , 0 Comments

Listen to Accounting Procedure Available Under the Substitution Decisions Act.

This week on Hull on Estates, Rick and David discuss procedure under the Substitution Decisions Act and review executor and attorney obligations as well as specific procedures permitting someone to compel an accounting.

Comments? Send us an email at hull.lawyers@gmail.com, call us on the comment line at 206-350-6636, or leave us a comment on the Hull on Estates blog.

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