Your duties as power of attorney for property in Ontario

The bank has accepted the power of attorney document, and you can finally pay the bills. Then the bigger question arrives: what exactly are you responsible for now, and how would anyone know if you got it wrong?

Ontario's Substitute Decisions Act and its regulations answer that in detail. They set out how you must act, what your parent's money must be spent on first, what you can't do with it, what records you must keep, and what you can be paid.^1,2,3 The rules protect your parent, and they protect you too, because an attorney who follows them can show it.

This guide is for adult children in Ontario acting under a parent's continuing power of attorney for property. It covers your duties in plain words, the spending and gift rules, the will, the records Ontario requires, a worked example of attorney pay, and what to do when siblings ask questions.

When do your duties as attorney start?

As long as your parent is mentally capable, they can keep making their own decisions about their money, even if the power of attorney document is already in effect.⁴ You act under the document and your parent's directions, and your parent can ask you for a full accounting whenever they want one.⁵

Most of the duties in this guide apply once your parent is incapable of managing property, or once you have reasonable grounds to believe they are.¹ From that point, Ontario applies the same duties to attorneys that it applies to guardians of property.¹ The duties and powers of the two are essentially the same. The main difference is how each one is appointed.⁶

Records are the exception worth starting early. Ontario's required list begins with your parent's assets on the date of your first transaction for them, so keeping records from day one is the simplest way to be ready.² Our free POA money tracker has tabs for your parent's accounts, property and debts, so you can record that starting list on day one.

Your core duties as power of attorney in Ontario

Once the duties apply, Ontario law says you must:

• Act for your parent's benefit, diligently, with honesty and integrity and in good faith. The law calls this being a fiduciary.¹
• Consider their comfort and well-being when a decision affects it.¹
• Fit in with their personal care decisions. Manage the money in a way that's consistent with decisions made by whoever has authority over your parent's personal care, unless the cost to their property would far outweigh the benefit.¹
• Explain your role to your parent, and encourage them to take part in decisions as much as they can.¹
• Help them stay in touch with supportive family and friends.¹
• Consult from time to time with supportive family and friends who see your parent regularly, and with the people who provide their care.¹
• Keep accounts of every transaction, in the form Ontario's regulation sets out (see the records section below).^1,2

The OPGT also tells guardians, whose duties are the same as an attorney's, to keep the incapable person's money completely separate from their own and never to borrow or use it for themselves, family or friends unless they have authority to.^7,6 It's still your parent's money. An attorney never becomes its owner.⁴

What you must spend your parent's money on

Ontario sets out three kinds of spending you must make from your parent's property, in order:¹

1. What's reasonably necessary for your parent's own support, education and care.
2. What's reasonably necessary for the support, education and care of their dependants, but only if there's enough to keep covering your parent's own needs.
3. What's necessary to meet their other legal obligations, such as debts, but only if there's enough to keep covering the first two.

You take into account the value of the property, the standard of living your parent and their dependants are used to, and the nature of the other obligations.¹

Gifts, loans and donations

These are optional, not required, and the rules are strict. You may make gifts or loans to your parent's friends and relatives, or charitable gifts, only if:¹

• There's enough money to keep meeting all the required spending above.
• For gifts or loans to friends and relatives, there's reason to believe, based on intentions your parent expressed before becoming incapable, that they would make them if capable.
• For charitable gifts, your parent authorized them in the power of attorney document, or there's evidence they gave similar gifts when capable.
• Your parent doesn't object. If your parent expresses a wish against a gift or loan, it can't be made.
• Charitable gifts stay under the cap: no more than 20% of the income from the property that year, or the limit the power of attorney document sets, whichever is less.

If your parent's power of attorney document gives instructions about gifts or loans, you follow them, within these limits.¹ A charitable gift above the cap needs a court order.¹

The will: what you need to know

You must make reasonable efforts to find out whether your parent has a will and what it says.¹ A person holding your parent's property, such as their lawyer, has to give you information about it, and the will counts as part of that property.¹

The will matters because you generally can't sell or give away something your parent's will leaves to a specific person. There are exceptions: the rule doesn't apply to a gift of money, and you can dispose of the property if it's necessary to carry out your duties, for example to pay for your parent's care.¹ Your authority ends when your parent passes away, and the will is then carried out by the estate trustee, not by you.^1,6

Keeping records the way Ontario requires

Ontario's regulation spells out what an attorney's accounts must include:²

You keep these records until your authority ends and one of a few things happens, for example you deliver them to the estate trustee after your parent passes away, or to whoever takes over managing the money.²

To keep organized, our free POA money tracker is built around this list, with tabs for your parent's accounts, money in and out, bills, property and debts, and a yearly summary.

Can a power of attorney be paid in Ontario?

Yes. Unless the power of attorney document says otherwise, an attorney is entitled to take compensation at a rate set by law.⁵ If the document sets its own terms, or says no pay, those terms apply.^1,5 The standard rate is:³

• 3% of money received (capital and income)
• 3% of money paid out (capital and income)
• 0.6% (three-fifths of 1%) a year of the average value of the assets, called the care and management fee

You can take it monthly, quarterly or once a year.¹ Taking more than the standard rate needs written consent from the Office of the Public Guardian and Trustee (OPGT), and from your parent's attorney for personal care or guardian, if they have one.¹

How much is that? A worked example

Here's the standard rate worked out for a made-up parent, Ray, for one year:

Scroll sideways to see the whole table.

Assets for the care and management fee include real estate, vehicles and bank accounts.⁷ Every payment you take must be recorded with its amount, date and how you calculated it.² The POA money tracker's yearly summary works out the standard amounts from what you've recorded.

Taking pay changes the standard you're held to

An attorney who isn't paid must use the care, diligence and skill an ordinary careful person would use in their own affairs. An attorney who takes pay must meet the higher standard expected of someone in the business of managing other people's property.¹ Whether to take pay is your choice, within what the power of attorney document says, so it's worth deciding deliberately and writing down what you decided.

When siblings ask questions

Being the attorney while brothers and sisters watch can be the hardest part. A few rules shape what happens:

• Your parent's financial information is confidential. You must respect their privacy unless the power of attorney document authorizes you to share it, or sharing is needed to carry out your duties or follow the law.⁵
• There's one important exception. Ontario's records regulation says you must give a copy of your accounts and records to your parent, or to your parent's attorney for personal care or guardian of the person, if they ask. A sibling who holds neither role doesn't have that automatic right.²
• The law expects you to consult. You must consult from time to time with supportive family and friends who are in regular contact with your parent.¹ Consulting isn't the same as sharing every statement, but it helps.
• A court can review your accounts. This is called a "passing of accounts." You can apply for one yourself, for example to have your management approved. Your parent can apply, and so can their attorney for personal care, a dependant, the OPGT and certain others. Anyone else, including a sibling who isn't a dependant, needs the court's permission to apply.¹
• The court has real powers. On a passing of an attorney's accounts, it can adjust your pay, suspend your authority under the power of attorney document while it decides, or appoint the OPGT or someone else as guardian in the meantime.^1,7

Good records are your best protection in any of these. If your accounts already follow Ontario's list, a review is much less stressful. If you're the brother or sister with the questions, our guide on what to do if a sibling is misusing a parent's power of attorney is written for you.

If something goes wrong

You can be held personally liable for damages caused by a breach of your duties. If you acted honestly, reasonably and diligently, a court can relieve you of all or part of that liability.¹

If someone has evidence that an attorney is mismanaging or stealing an incapable person's money, they can ask the court to review the accounts, report it to the police, or report it to the OPGT. The OPGT investigates when an incapable person is believed to be at serious financial risk.⁵ Our guide on what to do if a sibling is misusing a parent's power of attorney walks through each of these from the family's side.

If your parent never had a power of attorney, or some of their property is outside what the document covers, a guardian may be needed. Our guide on what happens if there is no power of attorney in Ontario explains how that works.

Your duties checklist

What to do next

If you're still setting things up, our guide on using a power of attorney at the bank covers getting banks and other institutions to accept the document. Once you're up and running, start your records with the list of assets and debts on day one, and keep them up to date as you go.