Attorney Compensation and Gifting Restrictions Under Nova Scotia Power of Attorney

The Default Rule: No Gifts

Under Nova Scotia's Powers of Attorney Act, an attorney is legally prohibited from making gifts from the donor's estate. This is the default position, and it's strict. The attorney cannot use the donor's money to give birthday presents to grandchildren, make charitable donations, or transfer assets to family members — even if the donor routinely did those things before losing capacity.

The only exception is if the EPA itself includes explicit language authorizing gifts. Even then, those gifts must never compromise the donor's care or financial stability. An attorney who makes unauthorized gifts faces personal liability and potential court action by the monitor, family members, or any interested person under Section 18 of the Act.

This catches many families off guard. A daughter named as attorney for her mother might continue the annual $500 holiday gifts to each grandchild, genuinely believing that's what her mother would want. Without written authorization in the EPA, she's technically in breach of her duties — and if other family members challenge her, the court won't accept good intentions as a defence.

When Gifting Authorization Makes Sense

If the donor has a history of regular gifts — annual contributions to a charity, monetary gifts to grandchildren, or ongoing financial support for a family member — and wants that to continue during incapacity, the EPA needs specific gifting clauses. These should include:

• The maximum amount per gift
• The frequency (annual, quarterly, etc.)
• The specific recipients or categories of recipients
• A cap tied to the donor's financial position, often expressed as "not to exceed X% of liquid assets" or "only while the donor's care costs are fully funded"

This level of specificity protects the attorney from accusations of self-dealing and gives banks and financial institutions clear authority to process the transactions. Without it, a bank's compliance department may refuse to execute gifts even if the attorney insists the donor would have approved.

Attorney Compensation

The 2025 Justice Administration Amendment Act (Bill 21) formalized the rules around attorney compensation in Nova Scotia. Attorneys can claim reasonable compensation for their services managing the donor's financial affairs, but the framework has conditions.

If the EPA specifies a compensation amount or formula — say, a fixed annual fee or a percentage of assets under management — that governs. If the EPA is silent on compensation, the attorney can claim "reasonable compensation" but may need court approval if challenged. The standard the court applies is similar to other Canadian jurisdictions: what a professional in the same position would charge for comparable services, adjusted for the complexity of the estate and the time invested.

In practice, family members serving as attorneys rarely claim compensation. Professional attorneys — such as trust companies or lawyers appointed to manage larger estates — almost always include compensation terms in the EPA from the outset.

Record-Keeping Requirements

Whether or not an attorney claims compensation, the Powers of Attorney Act requires meticulous financial record-keeping. The attorney must maintain:

• A complete inventory of the donor's assets and liabilities
• Receipts, invoices, and cancelled cheques for all transactions
• Records of any compensation claimed

The attorney is strictly prohibited from co-mingling personal funds with the donor's assets. Pre-existing joint accounts with a spouse are the narrow exception. The 2025 amendments reinforced this prohibition and gave monitors explicit standing to demand and review these records.

If a monitor or family member suspects unauthorized gifting or excessive compensation, they can apply to the Supreme Court to compel a formal accounting. The court can order the attorney to repay unauthorized amounts, reduce claimed compensation, or remove the attorney entirely.

Getting the Language Right

Gifting clauses and compensation terms are best addressed when the EPA is drafted — not after the donor has lost capacity. Retroactive changes require revoking the existing document and executing a new one, which is impossible once the donor no longer meets the capacity standard.

The Nova Scotia Power of Attorney Kit includes customizable gifting authorization and compensation clauses alongside the core EPA template, covering the scenarios that most commonly lead to family disputes and court challenges in this province.

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