There is a legal duty for attorneys to account for the money they spend on behalf of the person who granted them the power of attorney. They do this by "passing their accounts". They give notice to all those people who may be interested in the affairs of the grantor and provide a written accounting to the local court.

The written accounting must follow a specific format which is very similar to what executors and trustees are required to complete in the estate of a deceased person.

If an attorney does not volunteer to prepare the accounts, this can be compelled by application to the court. Anyone who has an interest in the affairs of the grantor may bring this application. The grantor and close family members certainly qualify, although others may also be interested.

The complexity and cost of passing accounts varies with the circumstances. Not only are there court costs, which are often trivial, but there are the professional fees of lawyers and accountants who often become involved in the process.

The attorney prepares a set of accounts that is delivered to those interested people, as determined by the court. Any of those interested parties may object to the actions taken by the attorney, whether or not the actions are disclosed in the accounting. This can then lead to contested litigation and can become very expensive.

A formal passing of accounts may be undertaken by institutional trustees, such as banks, as a matter of course. In such a case, there is rarely an active dispute. The passing occurs only to assure the court and the interested parties that nothing has occurred that is improper. It also stamps approval of the attorney's compensation.

One way in which attorneys, grantors and interested parties may choose to proceed is by specifying in the power of attorney document when and how often an attorney must pass the accounts. This may be done annually or at other intervals depending on what the grantor requires. The purpose is to keep all parties informed.

Christine Arcari

The Estate Law Group at McBride Bond Christian LLP

This is not legal advice. Please consult a lawyer before acting on any of the above comments.

This is the second post in our Powers of Attorney series. Our first post discussed considerations in choosing who to name as attorney. This post will highlight some common problems which may arise following appointment of an attorney. Remember that the power is the document; the attorney is the person named to exercise the power.

Read more: Powers of Attorney Series: When it all goes wrong →

This series of posts will cover issues that people face when considering powers of attorney. A power of attorney is the
document by which a person (the grantor) appoints someone else (the attorney) to act on their behalf. The series
raises questions and makes suggestions that people should discuss within their families and with their lawyers.

1. Naming the Attorney

The attorney should act with the grantor's best interests in mind. However, many things can go wrong with a power of attorney. For this reason, it is important for the grantor to carefully consider who the grantor names as the attorney.

The best recommendation is to name somebody that deserves your trust. This might be a loved one, a close friend, or a professional that you know. Here are some other tips to reduce risk when naming an attorney:

Read more: Powers of Attorney Series: Naming the Attorney →

Does your Power of Attorney for Personal Care account for the changing legal landscape around doctor-assisted suicide? In light of Friday's Supreme Court decision in Carter v Canada (Attorney General), additional attention now needs to be paid to the choosing and drafting of Powers of Attorney.

Read more: Carter v Canada (AG): Is your Power of Attorney sufficient? →

A person without mental capacity cannot make a valid Will. This concept, though it may seem obvious, can easily become complicated. This has often led to litigation.

To demonstrate capacity, people who make Wills (called the "testators") must appreciate:

  • the nature and extent of their property;
  • their moral obligations to their dependants and unique family circumstances; and
  • their reasons for excluding any of those who could claim dependant's relief.

Essentially people who make Wills must understand what they own and what consequences their Will may have.

Read more: Wills: Don't wait until it's too late →

Welcome to our inaugural blog post on Estate Law and Practice. This blog is for you if you are:

• A professional accountant
• A financial planner
• An insurance agent
• A professional who deals with wills and trusts
• A person interested in the important decisions surrounding aging, both financial and personal

We get it. No one likes to talk about death and dying when they are alive and healthy. No one likes to talk about what the consequences of their death might be. However, because we care about the people we advise and their clients and loved ones, we think it is important to prompt this reality check.

Read more: Let’s Talk About It: Wills and End of Life Planning →

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