The roles of an attorney or guardian of property carry a great deal of responsibility, not to mention the time and effort involved. So it makes sense in some circumstances that an individual should be paid.
Section 40 of the Substitute Decisions Act authorizes an attorney or guardian of property to take compensation for the work they do in managing someone else’s property and finances.
An attorney for property is a person authorized to manage the incapable person’s property, pursuant to a power of attorney document. This document must have been executed by the incapable person at a time when they were still capable. A guardian, on the other hand, is someone who is appointed by the courts to manage an incapable person’s property, as the incapable person did not appoint an attorney prior to becoming incapable.
In either case, the attorney or guardian of property is statutorily entitled to take compensation in accordance with the “prescribed fee,” which is set out in a regulation under the Substitute Decisions Act. This prescribed compensation is as follows:
- 3% on capital and income receipts;
- 3% on capital and income disbursements
- 3/5ths of 1% on the annual average value of assets as a care and management fee (this last fee has been determined to be exceptional by the courts)
The important thing to keep in mind is that this legislated formula is only a starting point for compensation. The power of attorney document itself, if there is one, may override the legislated fees by setting out a framework for compensation, or by barring compensation in its entirety.
In addition, the fees set out above are not automatic, even if the power of attorney document is silent as to compensation. If someone challenges the amount of compensation you are taking as an attorney or guardian of property, the courts will ultimately look at what amount of compensation would be fair and reasonable in the circumstances, having regard to the following five factors:
- The magnitude of the assets;
- The care and responsibility involved;
- The time occupied in performing the duties;
- The skill and ability displayed in managing assets; and
- The success of the administration.
It is also important to know that the total compensation found to be reasonable in the circumstances will be the same whether there is one attorney for property, or four. Ultimately, the number of attorneys or guardians does not impact on the amount of compensation – they must all share whatever amount is found to be reasonable. If the attorneys or guardians cannot agree on how to apportion their compensation, the courts will allocate it based on each attorney’s ability, as well as the work done and time expended by them.
For more information about compensation for attorneys and guardians, contact our Wills and Estates Group.