Abuse of Power of Attorney

By Martin Rumack

March 27, 2018

Abuse of Power of Attorney, Elder Abuse

More and more we are hearing about cases of Elder Abuse perpetrated by adult children of older parents. Abuse of Power of Attorney

Typical scenarios include:

1. Where a younger brother or sister abuses their role as Power of Attorney for their elder parent or older siblings;

2. situations where third parties are given Power of Attorney to act on behalf of an elderly individual (e.g. children, caregivers, financial advisors, accountants, lawyers, nieces or nephews, next-door neighbours, even the Butcher, the Baker, and/or the Candlestick Maker). In other words, anyone who is given a Power of Attorney whether for Property and/or for Personal Care (which some people refer to as a Living Will), can abuse the powers given to them.

This abuse of power is being reported more frequently due to the significant growth of the Baby Boomer generation. A better understanding of the obligations of parties appointed to act as a Power of Attorney, and an increased propensity to report situations in which abuse by a Power of Attorney is reported to a family member, and/or the authorities has resulted in the increased number of reports of Elder Abuse. Sometimes this takes the form of parties fighting over the division of assets. I have been involved in a few situations where the actions of a person who has been granted a Power of Attorney are being questioned by someone (generally a family member) who does not hold such a power. Questions often arise as to the mental and even the physical capacity of the person granting the Power of Attorney document (the Donor) at the time it was signed. Or, the party appointed as Power of Attorney may put obstacles in the way of the Donor being made available to talk to the family member who is concerned, or may hinder the Donor being available for an assessment or reassessment of their capacity at that later time.

Attempting to obtain a Court Order for an assessment/reassessment can become challenging especially where family members, in particular siblings, are involved. In these circumstances, the person given the authority to act as Power of Attorney may not clearly understand exactly what they are and/or not legally allowed to do. For instance, no person with a Power of Attorney, no matter whether they are children of the Donor or a third party, can legally take funds from a Donor’s account and deposit them to their own account even if it is only for the purpose of making it easier to pay the Donor’s bills in that manner. The person who has been granted the Power of Attorney is to make any proper payments from the Donor’s account.

Additionally, no Power of Attorney permits a person to borrow money, nor give themselves gifts from the Donor’s account – unless there is an established previous history of such gift giving. In my practice, I always recommend to my clients when discussing the topic of granting a Power of Attorney and/or appointing an Executor of Wills, one of the key tasks is to consider the qualities of the person you intend to appoint.

That person should be someone who:

1. Knows you well and understands you philosophically because of the broad discretionary powers given to these parties;

2. Has common sense and knows to reach out to a party who can answer their questions, or give them direction who to speak to for answers and/or direction. He or she need not be a professional or have “letters” after their names; and

3. Is trustworthy and likely to carry out your directions and wishes to the best of their ability.

Most recently, the Law Commission of Ontario published its final report on the topic of “Legal Capacity, Decision making and Guardianship”. The report contains several recommendations on improving the clarity and accountability for persons granted a Power of Attorney, specifically where there is the risk of financial abuse of older persons who have granted the power as Donor.

Included in the recommendations are the following:

1. The option to name a Monitor, who would have statutory powers to visit and communicate with the Donor and to review the accounts and records kept by the person with the Power of Attorney;

2. The delivery of notices to the Attorney acting at the time that the Attorney first begins to act in that capacity, which would be delivered to the Donor, the spouse, any previous Attorney and any monitor appointed, as well as any other person identified in the Power of Attorney instrument;

3. A mandatory standard-form Statement of Commitment to be signed by the people accepting the appointment as an Attorney prior to acting for the first time under such an appointment; and,

4. Creating a separate tribunal to deal with Power of Attorney issues in a more expedient and cost-effective manner.

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