Are you prepared to be POA?

June 12, 2019 | Colleen O’ Connell-Campbell


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POA. Power of Attorney. Except that often the P stands for PANIC and the A stands for AVOID.

I am – as are many of my friends - at a stage of adulting when my role as Power of Attorney is feeling more real and more onerous than on that day I said “yes”.

And, as Uncle Ben (from Spiderman) said, “With great power comes great responsibility.”

Acting as Power of Attorney is indeed a HUGE responsibility. You’re expected and required to act exclusively for the benefit of the person who ‘hired’ you. I wrote about hiring a POA back in April: Who will walk in your shoes, if you can’t?

I think it’s important to point out here that I deliberately use the word “hire” when I talk about assigning POA.

This is a JOB. As POA, you are entitled to financial compensation.

Some people (the legal term is ‘donor’), with direction from their legal representatives, will stipulate acceptable compensation. When professional organizations like Royal Trust are hired to fulfill this role, they write their fee into the POA document. If there’s no compensation or direction in your donor’s POA document, you can look to provincial laws for guidance. (Keep in mind, any monies you receive are taxable as income.)

You’re also entitled to reimbursement for ‘reasonable’ expenses you’ll incur as you fulfill your duties.

I know. If you’re acting POA for your parent or a close family member, you might feel conflicted about taking compensation. You might feel pressure from family members (who don’t fully understand what’s involved) not to request compensation. But as a professional who recognizes the immense responsibility and time commitment, I urge you to consider the hours, learning curve, and extra work involved and accept payment for your additional, sometimes full-time job.

If you’ve been named as a Power of Attorney, here’s what you need to know.

When you’re eventually called upon to act as POA (of Property in this case) your duties will include:

  • Making and planning for all expenditures related to care & support – food, shelter, health care, lifestyle – for the donor and the donor’s dependents
  • Filing income tax returns & ensuring taxes owing are paid
  • Paying all bills including debts
  • Taking inventory of all assets, managing & safeguarding them
  • Maintaining stringent and meticulous records of all transactions
  • Communicating with the donor’s family
  • And collaborating with the POA for Personal Care to ensure there are sufficient monies for health care and long term care needs

(This isn’t a full list! Ask me, and I’ll email you a more thorough outline.)

And you can start preparing now to fully understand your role.

  • You have a responsibility to act honestly, in good faith and ALWAYS in the best interests of the person you represent.
  • You need to READ the entire Power of Attorney document to ensure you understand the scope and restrictions assigned to you.
  • You may be jointly named. If you’re named with someone else, understand whether that is “jointly and severally” (you can each make decisions, independently) or “jointly” (ALL attorneys must approve action).
  • And, if you’re named jointly, be upfront and realistic about whether you can cooperate with the other named individual to act honestly, in good faith and in the best interests of the donor, together.
  • There may be trading authority or Power of Attorney documents at one or more financial institutions that relate specifically to certain assets, and attribute authority to someone else.
  • BEFORE you have to step into your duties, consider speaking to a lawyer or a trust company representative to thoroughly review and understand your specific POA role.

It’s natural to feel overwhelmed with the thought of being responsible for, not just you and your own family, but now your mother, father, brother, sister, or close friend. Like all matters of mortality and end-of-life preparation, most of us feel a bit panicky and would rather avoid thinking about it.

But you’re not alone, and there are wonderful, expert, compassionate resources out there to help you prepare for and fulfill your role.

Feel free to reach out to me here with any questions you may have, or for a Personal Prosperity Discovery Session to learn how to build your Roadmap to Real Riches - a fresh take on wealth management that optimizes how you spend, save & share your wealth, including the important preparations involved in estate planning.

Throughout June, listen to I'm a Millionaire! So Now What? (listen & subscribe here) for wonderfully human and info-filled interviews about Estate Planning, tough conversations and family matters most people won’t discuss.

Email me here for your copy of the RBC Brochure “Your reference guide for acting as an attorney under a power of attorney.”