Breach your marital duties and you could end up in trouble with your spouse, but breach your fiduciary duties under a power of attorney and a court could get involved.
For many married couples, their spouse is the obvious choice for appointment as their POA for property, considering the extraordinary power that appointees are granted over their affairs.
Under Ontario’s Substitute Decisions Act, the POA for property is handed control of not only of the grantor’s home and its contents, but also the decision-making power over bank accounts and investments. In fact, it’s no exaggeration to say that they can do anything they wish with a grantor’s property, other than making a will on their behalf.
The fiduciary duty is a kind of check on that power, requiring the attorneys to act in the grantor’s best interests. Sadly, it’s still not enough to stop POA misconduct, as a recent case involving a wealthy Toronto businessman, his incapacitated wife and his mistress shows.
According to the ruling, the couple at the heart of the story had been married for more than four decades when the husband – also her attorney for property – recruited a personal support worker in 2009 to take care of his wife during the night.
The husband and the PSW soon developed an intimate relationship and over the next ten years, he gave her almost $30 million – mostly in the form of gifts for real estate, investments and other property. After the man died in 2021, the matter made its way to court, where his estate sought the return of the money from the PSW.
Over the same period, the wife’s assets had dwindled from a peak of $5.4 million to less than $500,000 by the time of the trial and depleting fast, thanks to her $30,000 monthly care costs.
Ultimately, the judge ruled that the PSW was allowed to keep much of the money, since the deceased had freely gifted it to her. However, the judge found that the husband had overstepped the mark and breached his fiduciary duty when he gave $2.85 million to the PSW from one of his wife’s investment accounts, while acting under a POA for property.
As a result, the judge ordered the PSW to return $2.85 million to the husband’s estate, which will then hold it in trust for the wife’s future care and applied against the estate’s $5.4-million debt to the wife.
Not every estate will involve sums as spectacular as this one, but the fear of abuse is no reason for testators to put off selecting attorneys for property or personal care. These documents can be drawn up quickly and inexpensively, making them some of the most underrated instruments in the legal world, considering how critical they can become to the grantor’s life.
Sadly, many people don’t realize how much they need one until it’s too late. POAs are designed to kick in when a person becomes incapable of handling their own affairs, which means you need to have them in place ahead of time. Once a person reaches the point of incapability, they can no longer sign a valid POA, which can leave family members in a very difficult position.
The whole process can become quite expensive if the Office of the Public Guardian and Trustee has to become involved, and the court ends up making final decisions.
Although they don’t get a say over finances, attorneys for personal care also carry heavy responsibilities, taking decisions over the person’s health care broadly, including nutrition, shelter, clothing, hygiene, and safety.
You don’t have to pick the same person to perform both roles, but each document carries extraordinary power, so whoever you do choose to appoint should be someone you have absolute faith in.
Disclaimer: The content on this website is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this website are advised to seek specific legal advice by contacting members of Laredo Law (or their own legal counsel) regarding any specific legal issues.
