Understanding the Role of an Attorney for Financial Matters: A Comprehensive Guide

When someone becomes unable to manage their own financial affairs, their appointed power of attorney steps in to make decisions on their behalf. This crucial role carries significant responsibilities and requires careful attention to detail. Here's a complete overview of the duties involved in serving as an attorney for financial matters.

The Scope and Duration of Authority

The authority granted through a power of attorney document can be quite broad, encompassing most financial decisions except those related to estate planning (like writing a will). This authority may last for a short period or extend over many years, ending only when:

• The individual regains capacity to manage their affairs
• The authority is formally revoked
• The individual passes away

Core Responsibilities

Fundamental Duties

The foundation of serving as an attorney for financial matters rests on several key principles:

1. Fiduciary Responsibility
Acting in the best interests of the individual must guide every decision. This means:

• Putting their needs first
• Making prudent financial choices
• Maintaining strict separation between their assets and your own
• Following any instructions or restrictions in the power of attorney document

2. Documentation Management
Proper record-keeping is essential:

• Obtain original copies of all relevant documents
• Review the power of attorney document thoroughly
• Understand the scope and limitations of your authority
• Keep detailed records of all actions and decisions

3. Initial Assessment
Begin by creating a complete picture of the individual's situation:

• Get professional assessment of mental capacity if needed
• Review all personal and financial documents
• Create inventory of assets and liabilities
• Document all sources of income and expenses

Financial Management

Income Collection and Benefits

Ensure all income sources are identified and managed:

• Collect unpaid wages from current/former employers
• Apply for insurance benefits (disability, long-term care, critical illness)
• Process government benefits:
• Provincial disability payments
• CPP/QPP disability benefits
• Old Age Security
• Veterans' benefits if applicable
• U.S. Social Security entitlements if relevant

Bill Payment and Support

Handle ongoing financial obligations:

1. Basic Living Expenses

• Pay for food, clothing, and accommodation
• Maintain medical and dental care
• Handle subscriptions and personal needs
• Adjust spending based on available resources

2. Dependent Support

• Provide for education needs
• Ensure appropriate care and support
• Make payments for legal obligations

3. Cash Flow Management

• Adjust expenses for changing circumstances
• Plan for potential moves or medical expenses
• Coordinate with healthcare representatives

Asset Management

Investment Responsibilities

Manage financial assets prudently:

• Use appropriate standard of care
• Review and adjust investment strategies
• Handle digital assets appropriately
• Process any inheritance or settlement funds
• Execute necessary security transactions
• Review automatic investment programs

Property Management

Handle real estate and physical assets:

• Review all property documents
• Manage sales or purchases if authorized
• Obtain court approval for matrimonial home sales
• Maintain appropriate insurance coverage
• Manage safety deposit box contents
• Make authorized property transactions

Tax and Legal Obligations

Tax Management

Handle all tax-related responsibilities:

• File annual income tax returns
• Submit HST returns if required
• Pay taxes or claim refunds
• Request reassessments if needed
• Act as representative with CRA
• Handle international tax obligations

Legal Representation

Manage legal matters:

• Represent the individual in claims/lawsuits
• Mediate disputes
• Handle estate/trust claims
• Sign authorized legal documents
• Pay legal fees and expenses

Administrative Duties

Record Keeping

Maintain comprehensive records:

• Document all activities and decisions
• Keep receipts for expenses
• Track disbursements and income
• Maintain accurate activity logs

Coordination with Others

Work effectively with other representatives:

• Collaborate with co-attorneys if appointed
• Coordinate with healthcare representatives
• Seek professional advice when needed
• Keep relevant parties informed

Compensation and Accountability

Professional Responsibilities

Maintain high standards of service:

• Calculate appropriate compensation
• Provide detailed accounting of activities
• Document all expenses and reimbursements
• Submit to oversight as required

Transition Planning

Be prepared for changes in status:

• Review the individual's will for context
• Plan for potential recovery and account transfer
• Prepare to transfer authority to estate trustee upon death

Best Practices for Success

To effectively fulfill this role:

1. Keep meticulous records
2. Maintain clear separation of assets
3. Seek professional advice when needed
4. Stay within authorized powers
5. Communicate clearly with all parties
6. Review decisions regularly
7. Plan for contingencies

Remember that serving as an attorney for financial matters is a significant responsibility that requires dedication, attention to detail, and unwavering commitment to the individual's best interests.

Disclaimer: This content is for informational purposes only and does not constitute professional financial, legal, or medical advice. Always consult with qualified professionals for guidance specific to your individual circumstances.