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Powers of Attorney

How Far Can You Go With Estate Planning? Many of us consider a Power of Attorney (POA) document essential to the estate plan. The document is utilized while the donor (or “grantor”) of the power is alive and usually incapacitated. The POA is distinguishable from a Will, which takes effect on death. The question often arises as to what extent a person named in a POA can engage in estate planning on behalf of the donor of the power.

We are often asked what steps can be taken by a person named in a Power of Attorney, to engage in estate planning on behalf of the donor (or “grantor”) of the Power. Typically, the attorney is the child of the incapable person and is seeking to avoid probate, minimize taxes on death, or engage in other estate planning. Some of the transactions contemplated include the transfer of property into the attorney’s or siblings’ names, making gifts or loans to family members, or selling property and placing the proceeds in the attorney’s or siblings’ personal accounts. Difficulties with these and similar transactions arise due to the inherent conflict of interest when the attorney is a family member.

Source: Manulife Financial

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