A power of attorney transfers decision-making authority about your legal and financial affairs to another individual. It can be used to allow a family member or friend to make decisions about your health or personal property. Sometimes, disputes arise over the validity of a power of attorney, the decisions made by attorneys, and other related matters. For example, a party may allege that the person who granted a power of attorney did not possess the requisite capacity to do so.
This article introduces powers of attorney and the types of disputes that may result when things go wrong. We also look at a recent Ontario Superior Court of Justice decision, in which a daughter argued that her mother did not have capacity and was unduly influenced in the preparation of her powers of attorney for property and personal care.
A power of attorney can help ensure that your financial well-being and health care are protected in the event of your future incapacity. They are also helpful in other circumstances, for example, when you are travelling and need someone to sign a contract for you.
There are two types of power of attorney that a grantor (the person executing a power of attorney) can grant:
- Power of attorney for personal care: The chosen attorney is given authority to make decisions about your health in the event of your incapacity.
- Power of attorney for property: Your attorney can make decisions concerning your property, home, possessions and finances.
Given the extensive powers over essential aspects of the grantor’s life, disputes sometimes arise, including relating to:
- Whether a power of attorney is valid;
- If multiple powers of attorney exist, which power of attorney governs a particular situation;
- Decisions made or actions taken by an attorney;
- Compensation for attorneys; and
- The passing of accounts.
Notably, individuals only have the right to grant power of attorney while they remain legally capable of doing so. A grantor must also have capacity if they want to revoke or change an existing power of attorney.
In Zagorac v. Zagorac, a dispute erupted between a brother and sister over their 69-year-old mother’s powers of attorney. She suffers from corticobasal syndrome, a rare neurodegenerative disease whose symptoms are similar to Alzheimer’s symptoms. The daughter had always lived at home and cared for her mother. The son lived with his wife and children.
In 2015, the mother executed a Will along with powers of attorney, appointing her son as her power of attorney for property and all children as joint powers of attorney for personal care. In 2017, the son noticed an increase in her mother’s spending and was concerned that his sister might be mismanaging her assets.
In 2019, the son applied to the court for a declaration that his mother was incapable of managing property and personal care and that a person must make such decisions on her behalf. In response, his sister changed her mother’s bank password, phone number and house locks. She also took her mother to a lawyer and obtained powers of attorney for property and personal care, which appointed the daughter as the sole attorney.
The son argued that the 2019 powers of attorney were invalid due to his mother’s incapacity and that the 2015 powers of attorney were valid. While the daughter agreed that the 2019 documents were invalid, she argued that her mother did not have capacity and was unduly influenced to make the 2015 powers of attorney.
The court ordered that the mother undergo a capacity assessment, which concluded that the mother was incapable of managing her property and personal care. It also found that the last time she was likely able to appoint an attorney was in 2015.
The mother’s health care workers advised that she was no longer safe at home and must be moved to long-term care. However, her daughter opposed her mother living anywhere but at home.
The Court was highly critical of the daughter’s conduct, stating she “used her mother’s alleged capacity as a shield for taking nonsensical positions in this litigation”. The judge found that the mother was overwhelmingly influenced by her daughter, including in relation to the making of the 2019 powers of attorney.
The Court explained that the lawyer who prepared the 2015 powers of attorney had kept comprehensive notes, revealing that the daughter was upset when she found out that her brother had been named the sole attorney for property and decided that the documents should be changed.
The Court found that the daughter’s allegation that her mother was pressured into signing something that she did not understand was without foundation. Instead, the Court determined that while the mother was not under any undue influence in 2015, her daughter did begin to influence her in 2016.
Based on a range of evidence, including the doctor’s capacity assessment and lawyer’s notes, the Court found that the mother had the capacity to execute powers of attorney in 2015. As a result, the 2015 powers of attorney were declared valid, giving the son decision-making authority concerning his mother’s property.
Given an attorney’s significant power and responsibility, it is not uncommon for disputes to arise. The knowledgeable team of estate lawyers at Derfel Estate Law helps you protect the financial, health, and personal interests of your loved ones. We provide strategic and compassionate advice and ensure all parties are protected throughout the process. To schedule a confidential consultation, contact us online or by phone at 416-847-3580.