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POA Weekly – Week 19: Can an Attorney be Indemnified?

The question for the lawyer drafting powers of attorney for his/her clients is whether it is safe to rely on the indemnification provisions of the Substitute Decisions Act, or whether we should build into the POA a clause which protects the attorney.

In respect of Continuing Powers of Attorney for Property, the standard applicable for an attorney who is being compensated, differs from the standard for an attorney who is not being compensated. The compensated attorneys must exercise, “the degree of care, diligence and skill that a person in the business of managing the property of others is required to exercise.”  An attorney who is not being compensated, is only required to exercise “degree of care, diligence and skill that a person of ordinary prudence would exercise in the conduct of their own affairs.”

Attorneys who have acted in good faith, managed affairs prudently, kept good records and who have as much as possible involved the grantor in the decision-making will be protected in carrying out required fiduciary duties and obligations.

Indemnification clauses within POA documents may be of assistance, for example clauses such as:

I indemnify my attorney for any responsibility for loss or damage to my estate through an exercise by my attorney, in good faith, of any of the powers conferred by this Power of Attorney and by law.

This paper is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This paper is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.

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