Don’t let the power (of attorney) go to your head.
Unless they’re in the business of wills and estates, appointees under a power of attorney for property are often surprised by the extraordinary level of control this simple document gives them over the grantor.
Under Ontario’s Substitute Decisions Act, an attorney’s control extends well beyond a person’s home and its contents; a POA appointee also handles all of their financial income and outgoings, with access to – and decision-making power over – bank accounts and investments.
In fact, it’s no exaggeration to say that attorneys for property can virtually do as they please with a grantor’s property: the only limit on their authority is a prohibition on making a will.
Sadly, not everyone possesses the responsibility required of the job, and in the worst cases, grantors can be left open to financial abuse at the hands of an unscrupulous attorney.
In one recent case involving an incapable 91-year-old, the provincial Public Guardian and Trustee (PGT) stepped in, convincing a judge it should take over as attorney from the man’s brother, who had misappropriated more than $200,000 from his accounts.
According to the ruling, the elderly man actually appointed two of his brothers jointly under a continuing power of attorney, but one of them lived closer and was in better health, so had taken the lead in the role since 2022.
Since the POA was enacted, the judge noted that the incapable man’s retirement fund had dwindled from $112,000 to zero, with a similar amount paid out to his brother in cheques from his bank account. In addition, there were unexplained credit card charges for more than $5,000 to Toronto strip clubs, bars and restaurants.
“Clearly none of these expenses were incurred by or on behalf of” the incapable man, the judge wrote, noting that he lived at a care home where his brother had missed many months of payment while in charge of his personal property.
By the time of the hearing, the brother acting as attorney agreed that he should be removed, but said he would rather see a family member take over the role. However, no family members made themselves available and the judge appointed the PGT as the man’s permanent guardian of property, finding that the brother had not only breached his fiduciary duties: “He has shredded them.”
Still, the fear of abuse is no reason 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, as here, the PGT 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.
