Acting as a power of attorney or as an estate trustee carries a great deal of financial and legal responsibility. But in Let the Records Show, authors Linda A. Alderson and Douglas Alan Alderson have distilled the information and have provided a step-by-step guide to keeping financial and property affairs in order. Let the Records Show offers a ten-step guide for effectively handling record-keeping obligations, and it demystifies and simplifies the terminology and related work processes associated with creating a complete and proper information trail to satisfy legal interests. It also provides: Answers to questions to consider before acting as an attorney; An overview of accounting and legal terms presented in plain English; Tips on the fundamentals of being an attorney or estate trustee; Guidance on inventory preparation; Comparison between the roles of attorney and estate trustee; A review of common problems and how to fix them; Information on estate litigation basics; Charts, templates, and checklists to help you stay organized Filled with practical guidance on how to maintain financial records to meet the legal requirements, Let the Records Show helps to simplify the roles of power of attorney and estate trustee.

Let the Records Show

A Practical Guide to Power of Attorney and Estate Record KeepingBy Linda A. Alderson Douglas Alan Alderson

iUniverse, Inc.

Copyright © 2011 Linda A. Alderson and Douglas Alan Alderson
All right reserved.
ISBN: 978-1-4620-0670-0

Contents

Preface............................................................................................xiA Note about Jurisdiction..........................................................................xiiiDisclaimer regarding Legal Advice..................................................................xvAcknowledgements...................................................................................xviiIntroduction.......................................................................................xixGlossary: Accounting and Legal Terms in Plain English..............................................xxiiiChapter 1: Just the Facts: Questions to Consider before Acting as Attorney.........................1Chapter 2: Just the Basics: Fundamentals the Attorney Needs to Understand..........................6Chapter 3: The Legal Rules of Financial Record Keeping.............................................19Chapter 4: Record Keeping and the Capable Grantor..................................................25Chapter 5: Ten Steps to Carefree Record Keeping....................................................30Chapter 6: Preparing the Inventory: The Foundation of Financial Record Keeping.....................59Chapter 7: I'm Not an Attorney, I'm an Estate Trustee..............................................99Chapter 8: What to Do When Things Go Wrong!........................................................108Chapter 9: Oops, Litigation Pending................................................................129Chapter 10: Final Thoughts.........................................................................139Appendices.........................................................................................143References.........................................................................................201Index..............................................................................................209

Chapter One

Just the Facts: Questions to Consider before Acting as Attorney

You have an important decision to make when presented with the opportunity of becoming an attorney under a continuing power of attorney for property or an estate trustee: Do I really want to do this? Although you have been named as an attorney or estate trustee, you still have a choice as to whether or not to accept the honour and responsibility. Before you commit yourself to any acts that would constitute acceptance, ask the following important questions. Be aware that an action taken that would normally form part of the duties you are being asked to undertake, even before a formal response of "yes" or "no" is given, could be construed as an acceptance. Once acceptance is implied or stated, it can be time consuming and awkward to remove yourself from either the role of attorney or estate trustee. Though many of these questions are simple and straightforward; their answers are not. The reader is therefore cautioned that the answers that follow are general in nature, and that the reader's specific circumstances may require seeking out detailed legal advice.

Why is it so important to maintain clear and appropriate records?

Apart from the legal requirement to do so, there may come a time when there is a need for an evidentiary record of your stewardship of the grantor's affairs when you are called upon to account for your management of those affairs or the deceased's estate activities. This is most likely to occur when there is litigation threatened or instigated, when there is a tax audit by the Canada Revenue Agency, when you cease to act as an attorney or upon the wind-up of the estate.

For a more in-depth discussion of this topic, see the section entitled "Why care about doing this right?" in Chapter 2.

Do I need to use an accounting software program to keep the financial records?

No, you do not need to use a software program to keep the financial records, although using one can make life much easier and the job less time consuming when it comes time to sit down with the grantor or the beneficiaries of an estate. Whether you choose to do so will be based on such factors as how much activity there is and how comfortable you are with basic bookkeeping tasks. Most people may find a spreadsheet package such as Excel meets their needs.

See the section "Where do I keep all the paper/documentation related to the record keeping?" in Chapter 2 for a more in-depth discussion.

How are the financial records of one person maintained when there are two or more persons appointed as attorney under the power of attorney for property?

If the tasks required to look after the property of the grantor are split between two or more attorneys, it will be necessary to ensure that they timely and accurately combine records into one central file. This will also provide an opportunity to review the transaction and property records for completeness and to verify that what was understood to be happening from ongoing verbal communication has indeed been happening.

Something that might influence how sophisticated your financial record-keeping procedures are will be the governance structure specified in the CPOAP, e.g., majority rule or one attorney having ultimate authority. Moreover, you need to confirm whether the appointment is "jointly" or "jointly and severally". If it is a "joint" appointment, then all decisions must be made together with the other party or parties who are also appointed. The ability to act "jointly and severally" means that you can act alone. However, care should be taken to ensure that your actions are consistent with other actions being taken and that all actions are made in the best interests of the grantor. At a minimum, this means that as far as record keeping goes, one set of records are maintained in an accurate and timely manner.

Are there differences between financial record-keeping responsibilities of a power of attorney for personal care and a power of attorney for property, and if so, what are they?

In Ontario, Regulation 100/96 made under the Substitute Decisions Act, 1992, stipulates the exact requirements with respect to the content of the records that must be kept for either a continuing power of attorney for property or a power of attorney for personal care. Although the record-keeping duties and principles are the same for both personal care and property attorneys, the content of those records differ. In other words, given the difference in the nature of the decisions being made by an attorney for personal care versus those being made by an attorney for property, a greater amount of financial record keeping is required for the latter. Therefore, it is important for both attorneys to understand their role in relationship to one another. Neither one should attempt to carry out their role in isolation. Working in isolation when there is a common goal (that being the ultimate well-being, both physically and financially, of the grantor) can be disastrous in the long run, resulting in much aggravation and stress for all parties, e.g., the introduction of lawyers and formal Court requirements.

Non-financial record-keeping requirements specific to being an attorney for personal care are outside of the scope for this book. Should...