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Dear Nancy,

I am a daughter of a parent who is in her 90s. She thinks she is capable of making decisions and still managing her affairs but is showing signs of forgetfulness. I have been named as her power of attorney for property and health because I am her only child and my father has already passed away. What do I do?

Signed Connie

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Dear Connie,

First of all, you need to try and have a conversation, with possibly a health care professional present, to explain in a non-confrontational way that she may be becoming forgetful and confused but not aware of it. You need to stress to her the possibility of you exercising your power of attorney to protect her interests. She could be issuing cheques and monies in duplication or for reasons that are not essential. If she does not want to willingly enter into this arrangement, you may have to get a professional assessor to confirm or deny her capacity to make decisions.

If you are acting under the authority of a Power of Attorney, it is important to remember that you have a fiduciary duty to act in her best interest as if she was still capable of doing so. What this means, for example, is that if she regularly makes a donation to a specific charity that you continue to do so if it makes fiscal sense. You cannot, nor should not, change her monetary habits and act as though the assets are now yours. Often people lose sight of their responsibility to the issuer of the power of attorney, resulting in misuse of the funds.

If there are other beneficiaries, a power of attorney can be asked to give full disclosure and accounting for transactions done under that authority for suitability and appropriateness.

It is a big responsibility to act as someone's power of attorney. In some cases, where the person's financial affairs are quite complicated, it may make sense to enlist the help of a trust company to professionally manage the affairs.

Nancy Woods is an associate portfolio manager and investment adviser with RBC Dominion Securities Inc. Visit her website www.nancywoods.com or send an email request to asknancy@rbc.com. You can send your questions to asknancy@rbc.com as well.

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