Prescribed By Law: Duties of Attorneys for Property

The duties of an attorney for property are prescribed by law. The law comes from statutes (legislation passed by provincial or federal government), regulations (which accompany legislation and which give further details or expand upon provisions in the legislation); and case law (judge-made law).

What’s my point? Most attorneys for property are not aware of the many laws which apply to them and what these laws can mean for them personally, financially, and legally.

Accounting Duties of Attorneys for Property

The Substitute Decisions Act, 1992 is the law in Ontario that describes many of the duties of an attorney. Ontario Regulation 100/96 describes the attorney’s accounting and record keeping duties in greater detail.

In particular, an attorney for property is required to keep detailed accounts of all property of the person whose property they are managing. The accounts are described below. As you can see from the length and detail below, the attorney has quite an onerous duty. In some cases, the attorney’s duties are easily equivalent to a part-time or even a full-time job!

1. “Original Assets” – The attorney for property must keep a list of all the person’s assets on the date the attorney first starts making financial decisions or transactions. Let’s call this a list of “original” assets. The list of original assets includes but is not limited to the person’s:

• Real estate
• Money
• Securities (stocks, bonds, etc.)
• Investments (i.e. TFSAs, RRSPs, RRIFs)
• Vehicles, boats, etc.
• Personal property (household contents, etc.)

2. “Assets Received and Disposed Of” – An ongoing list of all assets the attorney receives and disposes of on behalf of the person, including:

• The asset / value received or disposed of
• The date of the acquisition or disposal
• From whom the asset was acquired or to whom it was disposed
• The reason(s) for the acquisition or disposal of the asset.

3. “Monetary Receipts” – An ongoing list of all money received by or on behalf of the person, including:

• The amount received
• The date of the receipt
• From whom it was received
• The reason for the payment to the incapable person
• Particulars of the account into which the payment was deposited.

4. “Monetary Disbursements” – An ongoing list of all money paid out on behalf of the person including:

• The amount paid out
• The date of the payment
• To whom payment was made
• The reason(s) for the payment.

5. “Investments” – An ongoing list of all investments made on behalf of the person including:

• The amount invested
• The date of the investment
• The interest rate and type of investment purchased or redeemed.

6. “Original Liabilities” – A list of all of the person’s liabilities on the date the attorney first started making decisions for the person.

7. “Ongoing Liabilities” – A list of all liabilities incurred and paid (discharged) on behalf of the person, including:

• The amount of the liability
• The date it was incurred and discharged
• The reason it was incurred and discharged.

8. “POA Compensation” – An ongoing list of all compensation taken by the attorney, if any, including:

• The amount of compensation
• The date it was paid
• The method for calculating compensation.

9. “Care and Management Fee” – A detailed explanation of how the care and management fee was calculated, if at all. This, by the way, is an additional fee, in excess of the regular POA compensation, which attorneys may take if the work involved in managing the person’s assets is above and beyond the normal work of an attorney for property. The explanation would include:

• The amount of the fee
• The assets and value of each, used to calculate the fee.

Based on the details listed above, you can imagine that most attorneys for property are quickly in over their heads.

You Can Be Taken to Court for Failing to Keep Detailed Accounts

What happens if the attorney fails to keep detailed accounts and supporting documentation? The attorney is in real danger of being taken to court, where they will be forced to undergo an audit of their accounts.

If the attorney is forced to undergo an audit of their accounts, they are at real risk of being found financially and legally responsible for all money or other assets that they cannot prove were used for the benefit of the person.

Here is a critically important caution: It is not enough for the attorney for property to simply tell the court that the money or other assets were used for the benefit of the person – the attorney must actually prove this with supporting records, invoices, receipts, and bank statements.

The attorney could be found responsible for repaying every dollar for which they do not have receipts or other supporting documentation proving were used for the benefit of the person!

TIP: For the attorney’s protection, they should keep detailed accounts following the form and content required by law, as well as all supporting documentary evidence. That way, if ever required to prove where the  person’s money or other assets went, the attorney can prove this. Similarly, the attorney can disprove allegations of dipping into the person’s assets for their own benefit, or even allegations of financial abuse and fraud, if they are ever accused of these.

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