Gifting of assets and power of attorney
Your question is one of the more common ones that comes up in my practice, Chris. First off, I am sorry to hear about your mother. Dementia is a challenging impairment and I know from experience how difficult it can be to care for and make decisions for an aging parent.
When acting as attorney for your mother, you are responsible for making financial and health care decisions on her behalf. A power of attorney can generally appoint someone to do anything with your finances that you can do. That can include banking, managing investments, buying or selling real estate and so on.
An attorney cannot write a new will or make changes to beneficiary designations. They must act in the best interest of the individual who appointed them. They are a fiduciary with a very high standard of conduct.
In your role as your mother’s attorney, Chris, you are supposed to manage her finances for her. This does not generally include gifting her assets to others, like yourself and your siblings.
What is an executor in Canada?
You mention you are her executor as well. An executor is an individual who is appointed in a will to distribute the estate of the testator (the person who wrote the will). A power of attorney applies during someone’s life and ceases immediately upon their death. That is when their will and the executor take over (though practically, it may not be official until the will is probated).
Even if your mother’s will states that her estate is to be divided equally between you and your siblings, Chris, you are not yet acting as her executor until she dies. While she is alive, you should be managing her money for her and that generally does not include making early estate distributions.
The risks of gifting a living parent’s assets
Despite this, many people do start to divvy up their parent’s estate before they die. There are risks in doing so.
The primary risk is that you are not acting properly in your role as her attorney. You could be personally liable for improper management of her finances.
