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In Ontario a Power of Attorney can claim 3% of the monies received and disbursed by the grantor.
Q: My wife’s sister has been diagnosed with Alzheimer’s disease, and is now living in a retirement home with some assistance. She named my wife Power of Attorney. Can my wife claim a fee for looking after her and her affairs?
—Terry Dickson, Kitchener, Ont.
A: Your wife can claim a fee as Power of Attorney, because you reside in Ontario. Other provinces handle the matter differently, but in Ontario you can claim 3% of the monies received and disbursed by the grantor, and a management fee of 3/5ths of 1% of the average annual value of the grantor’s assets. (That is, unless a different fee arrangement had been laid out in the Power of Attorney document that your wife’s sister signed.) Toronto estate lawyer Ambie Edgar-Chana cautions that when you’re compensated you “will be held to the benchmark of an expert in managing the grantor’s financial affairs, and if you fall short you can be held financially liable, personally.” Keep meticulous records and be prepared to justify your decisions. It’s serious business, being Power of Attorney, but I’m sure your family is grateful you’re taking the lead.
Bruce Sellery is a frequent guest on financial television shows and author of Moolala. Do you have your own personal question? Write to Bruce at [email protected].
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The 3/5ths of 1% of annual average assets is the issue in the calculation. There is no time frame stipulated on when you can pay yourself this. Legally you could charge this hourly unless it is stated in POA document. So the POA could legally clean out the accounts in a couple weeks under current regulations.
How about in Quebec?
Once we asked the accountant to calculate the POA fee, is it legal to just draw the fee from grantor’s account by ourselves or we have to apply through a layer or Public Guardian and Trustee office?
If it has to go through lawyer, is the legal fee reimbursed by the grantor’s asset as well.
Thank you in advance for your advise.
Is the 3% of the persons, monthly income, or of the total estate?