Understanding The Liabilities Of A Power Of Attorney

A Power of Attorney (POA) is a written, notarised and witnessed document signed between two or more individuals granting the designated person authority to make financial, medical and other decisions on behalf of the other individual, as and when specified in the contract. The person enabling the responsibilities is known as the grantor while the person authorised with the duties is known as an attorney or an agent.

In Alberta, the documentation and execution of a POA is regulated by the Power Of Attorney Act. This Act allows the agent to take financial decisions on behalf of the grantor upon his demise or under any other conditions specified in the POA. Hence, the selected agent has a legal responsibility of carrying out the grantor’s directives in accordance with his wishes. Failure in the execution of the duties of a POA can lead to litigation on the part of the agent.

Here’s a closer look at the power of attorney liabilities:

Financial Abuse

A Power of Attorney can usually be assigned in two distinct ways – Enduring and Ordinary. An Ordinary POA remains valid for the duration in which the grantor is alive or is mentally competent to give instructions while an enduring POA remains valid even if the grantor becomes mentally frail.

Hence, assigning a POA can leave the grantor’s assets such as his property and his capital vulnerable to misuse by the agent. To ensure the correct implementation of the grantor’s wishes, it is crucial to draft an inclusive POA with the help of an estate lawyer.

An experienced lawyer can help you include provisions such as the payment of a certain sum of money to the agent every month reducing the risk of financial abuse or obligatory tabulation of all the expenses made by the agent using grantor’s resources to avoid litigation in the future.

Potential Conflict

Assignment of a POA can also invite potential conflict between the agent and the grantor’s beneficiaries in the future. The legal heir may not agree with the mode of execution used by the agent or may not wish to comply with the grantor’s wishes, in the case of an enduring power of attorney.

Many POAs also include the assignment of more than a single attorney, leading to conflicts and disagreements between the agents at a later stage. Consulting a lawyer can help you mitigate these conflicts early on and find a method of resolution effectively.

Misuse of a Healthcare POA

A Power of Attorney does not directly grant the agent consent to take healthcare decisions on the behalf of the grantor. A separate document known as a Personal Directive needs to included in the POA contract to ensure the agent can make healthcare directions in the cases where the grantor is incapable of making them himself. This exposes the grantor and the attorney to further liabilities in the future.

In most cases, the agent cannot be held liable to a civil action if he makes healthcare decisions for the grantor in good faith. However, if negligence or omission of the basic healthcare standards is revealed, the agent is held accountable for the decline of the grantor’s medical fitness.

Designating or being assigned a POA can be a complicated responsibility which if not carried forward correctly can lead to heavy litigation for the grantor or the agent. Consulting a skilled law firm can help you understand these Power of Attorney liabilities better.