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Agents, Attorneys & Personal Representatives: An Introduction

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Estate Planning and Estate Litigation Bulletin

This bulletin describes some of the general duties of an Agent under a Personal Directive, an Attorney under an enduring Power of Attorney and a Personal Representative under a Will as prescribed in Alberta legislation. 

Generally speaking, individuals who occupy such positions share a common duty called a “fiduciary duty”, which requires that the individual act in the best interests of the person for whom he or she is responsible and prohibits personal interests from conflicting with such obligations. The fiduciary duty must be stringently observed while an individual acts as an Agent, Attorney and/or Personal Representative. 

The Agent

An Agent acts under a Personal Directive to make decisions on the maker’s behalf when that person is unable to do so due to mental impairment or physical infirmity. 

The Agent’s responsibilities and authority arises after two service providers (as defined in the legislation), one of whom must be a physician or psychologist, find that the maker is incapable of making decisions.  At that time, the Agent will be able to make decisions regarding “personal matters” authorized under the Personal Directive, including decisions relating to health care, accommodations, whom a maker may live and associate with, participation in social, educational and employment activities and legal matters. 

While making these decisions, an Agent must act in accordance with the instructions contained in the Personal Directive.  If a decision is not specifically addressed by the document, the Agent must make the decision that he or she believes that the maker would have made in the circumstances based on the maker’s wishes, beliefs and values. If the Agent does not know the maker’s wishes, beliefs, and values, the Agent must make the decision believed to be in the maker’s best interests. 

The Agent has an overriding duty to consult with the maker (even though he or she has already been declared incapacitated), before proceeding with any decisions and must regularly consider the capacity of the maker. A re-assessment of capacity must be performed if there is evidence that the maker has regained capacity. 

An Agent must maintain a record of all decisions made on the maker’s behalf. These records must be kept until two years after the Agent’s decision-making authority has ended.

The Attorney

An Attorney under an enduring Power of Attorney (“EPA”) is responsible for financial decisions on behalf of the donor. The Attorney does not make decisions regarding health care or “personal matters” (as described above), as those decisions are the responsibility of the Agent.

Generally speaking, an Attorney has very broad authority to take any financial decisions and actions that the donor could have taken before losing capacity unless the EPA limits such powers. 

In addition to the common law fiduciary duty described above, the Attorney has an overlapping legislative responsibility to protect the best interests of the donor during any period in which the attorney knows (or reasonably ought to know) that the donor is unable to make reasonable judgments. This overarching duty persists so long as the Attorney has the authority to act on behalf of the donor. 

An Attorney is responsible for managing the financial assets and liabilities of the donor. These responsibilities typically include:

  1. Using the donor’s assets to support and care for the donor;
  2. Overseeing the investment, management and care of the donor’s assets;
  3. Paying the donor’s bills;
  4. Preparing and submitting the donor’s tax returns;
  5. Maintaining trusts for dependents;
  6. Dealing with any legal and accounting matters; and
  7. Making gifts or loans to relatives and charitable donations based on the donor’s previous practice and intentions, so long as the EPA gives the Attorney that power.

The Attorney may apply to Court for advice and directions regarding any financial matter of the donor.

While there is no statutory requirement to keep records for a certain amount of time, it is advisable to maintain the records for at least two years after the Attorney’s decision-making authority has ended.

The Personal Representative

The Personal Representative is generally responsible for the administration of the deceased’s estate. 

A Personal Representative must perform the instructions laid out in the Will honestly and in good faith. Typically, the main duties are:

  1. Making arrangements for the disposition of the body, and for funeral, memorial or other similar services;
  2. Determining the names and addresses of those beneficially entitled to the estate property and notifying them of their interests;
  3. Arranging with a bank, trust company or other financial institution for a list of the contents of a safety deposit box;
  4. Determining the full nature and value of property and debts of the deceased as at the date of death and compiling a list, including the value of all land and buildings and a summary of outstanding mortgages, leases and other encumbrances;
  5. Examining existing insurance policies, advising insurance companies of the death and placing additional insurance, if necessary;
  6. Collecting, protecting and securing the safety of any estate property;
  7. Providing for the protection and supervision of vacant land and buildings;
  8. Arranging for the proper management of the estate property, including continuing business operations;
  9. Taking control of property and selling property
  10. Retaining a lawyer to advise on the administration of the estate, to apply for a grant from the court or to bring any matter before the court;
  11. Applying for any pensions, annuities, death benefits, life insurance or other benefits payable to the estate;
  12. Advising any joint tenancy beneficiaries of the death of the deceased;
  13. Advising any designated beneficiaries of their interests under life insurance or other property passing outside the Will;
  14. Arranging for the payment of debts and expenses owed by the deceased and the estate;
  15. Determining whether to advertise for claimants, checking all claims and making payments as funds become available;
  16. Taking the steps necessary to finalize the amount(s) payable if the legitimacy or amount of a debt are in issue;
  17. Determining the income tax or other tax liability of the deceased and of the estate, filing the necessary returns, paying any tax owing and obtaining income tax or other tax clearance certificates before distributing the estate property;
  18. Instructing a lawyer in any litigation;
  19. Preparing the Personal Representative’s financial statements, a proposed compensation schedule and a proposed final distribution schedule;

Once all the property is distributed, a Personal Representative will then obtain a final Release from the residuary beneficiaries.

As part of his or her fiduciary duty, a Personal Representative must regularly create and maintain records about the administration of the estate, communicate with beneficiaries regarding their actions, and treat beneficiaries equally without preferring one over another. 

When faced with difficult or uncertain situations, a Personal Representative can obtain legal advice or apply to the Court for advice and directions in respect of the management and administration of the estate.

In closing, acting as an Attorney, Agent or Personal Representative for a loved one can be an honor and a sign of the trust that is reposed in you. That said, these positions give rise to significant responsibilities - often in difficult circumstances. In our experience, successfully navigating through the numerous obligations and duties can be done with proactive and thorough planning, sound advice, and a strong support system.  

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