DeDominicis: Charitable gifts made under a Power of Attorney

A Power of Attorney, if used carefully, is a very important estate planning tool.

Vanessa DeDominicisThis legal document is commonly prepared to provide for situations where a person cannot manage his or her own financial and legal affairs. By way of a Power of Attorney a person (the “donor”) gives another person or a trust company (the “attorney”) the power to deal with all, or a limited number of, the donor’s legal and financial affairs. In order to make a valid Power of Attorney, the donor must be of sound mind and not be under any duress. The document must be in a certain form and be properly signed and witnessed.

An attorney must act honestly and in good faith, exercise the care diligence and skill of a ‘reasonably prudent person’ and act within his/her authority granted under the Power of Attorney. Further, the attorney has a general duty to act in the adult’s best interests, taking into account the adult’s current wishes, known beliefs and values.

An attorney is also allowed to make a charitable gift or gifts, from the adult’s property, if permitted by the Power of Attorney or if the adult usually made such gifts and there would be sufficient property remaining to meet the adult’s needs, as long as the total value of all gifts, loans and charitable gifts made by an attorney in a year are not more than 10 per cent of the adult’s taxable income for the previous year or $5,000, whichever is the lesser of the two.

It is a large responsibility at the best of times to be asked to act as someone’s attorney. With the additional responsibility of being able to make charitable gifts on behalf of a potentially mentally incapacitated person in accordance with their “current wishes, known beliefs and values” is often extremely difficult, especially if the attorney didn’t know the donor that well when he/she did have capacity. It can be a huge burden on the attorney to decide whether or not to give to charity on behalf of the donor and which charity or charities to donate to.

Burden of these decisions aside, Powers of Attorney are a fundamental tool in planned giving. They allow the attorney to keep a planned giving strategy viable while the donor is still alive, but incapacitated. If the attorney was not permitted to make charitable donations, a comprehensive tax strategy using charitable gifts to reduce estate taxes may collapse.

Just Posted

Comedy show to help Kelowna man paralyzed in crash

Warden is an incomplete C-5 quadriplegic, who was injured in a near fatal motor vehicle accident.

People’s Party of Canada builds self in Kelowna-Lake Country federal riding

Over 30,000 members have joined in the riding so far

Central Okanagan Crime Stoppers search for two men

Two men allegedly were attempting to break into community mailboxes in Lake Country

Photos: Marking 100th anniversary of armistice in Kelowna

The Remembrance Day ceremony filled City Park

Photos: Lake Country honours veterans with Remembrance Day ceremony

The ceremony marks the 100th anniversary of the signing of armistice

Trudeau warns of dangers of nationalist leaders at historic armistice gathering

U.S. President Donald Trump in recent weeks described himself as a nationalist

Politicians need to do better on social media, Trudeau says

Prime minister suggests at conference in Paris some are trying to use technology to polarize voters

Wally Buono exits CFL, stinging from painful playoff loss

B.C. Lions lost the Eastern semifinal to the Hamilton Tiger-Cats on Sunday, 48-8

Pot company hopes to replace jobs lost in mill closure in B.C. town

About 200 workers lost their jobs when the Tolko sawmill in Merritt shuttered in 2016

Funding announcement promises to drive business innovation in B.C.

Minister is scheduled to make the announcement at the Penticton campus of Okanagan College

Auntie Says: A time to remember the freedoms we have today

Faye Arcand is a freelance writer for the Penticton Western News

Ticats destroy Lions 48-8 in CFL East Division semifinal

Wally Buono’s last game as B.C. coach ends in disappointment

Olympic decision time for Calgarians in 2026 plebiscite

Calgary’s ‘88 legacy is considered among the most successful in Olympic Games history

Canadians mark Remembrance Day, 100 years since end of First World War

The sombre crowd stood in near-silence as it reflected on the battles that ended a century ago, and those that have come since

Most Read