Being named the power of attorney for someone’s property or personal care is a significant responsibility and one that should not be taken lightly. Having power of attorney for property means you are responsible for decisions related to someone else’s property, including their bank accounts and physical property. This is usually done when someone is unable to take care of these responsibilities themselves. Similarly, a power of attorney for personal care is put in place when someone needs help making decisions concerning their health. It’s important to choose someone you absolutely trust with these responsibilities because it’s possible for people to take advantage of others with these powers. In a recent decision from the Ontario Superior Court of Justice, we see how important it is to be aware of what someone should or should not do as the power of attorney for personal property.
Elderly woman appoints neighbour with power of attorney
The trial came about as a result of the Public Guardian and Trustee (“PGT”) looking to displace the respondent (“KM“) as the guardian for property of an elderly woman (“JC”). JC is 90-years-old and suffers from cognitive impairments as well as dementia. She has no children, but she does have a niece (“MM”), who lives in the United States.
Until she moved to a long-term home, JC and KM lived next door to one another. Needing someone to take care of her property and health, JC appointed KM as her attorney for property and personal care. She also made a new will, naming KM the estate trustee and a residual beneficiary of the estate.
Two days before JC was admitted into a long-term home, she and KM visited a bank where JC transferred KM $250,000. They also transferred MM $195,329.
Throughout the period she acted as attorney for personal property, KM received another $71,000 in gifts and transfers from JC.
At a time before the trial, KM was removed as JC’s attorney for personal property. However, the PGT sought to collect $346,771 that was given to KM by JC.
Should the neighbour be able to keep the gifts?
The court began its analysis by noting that JC had always been careful with her money, allowing her to build a net worth of over $1 million exclusive of real property. She became dependent on KM as her health deteriorated. The court recognized that the two developed a close relationship, but when looking at the timing between the diagnosis of JC’s dementia and the transfer of large amounts of money, the court grew concerned.
The Supreme Court of Canada established in 2007 that when a gratuitous transfer of property occurs, there is a presumption of a resulting trust that the recipient must rebut. While KM argued the transfers were gifts, the court said it has no evidence of this. While KM said the transfers were what JC wanted, the court said it had a hard time believing that could be true. The court ordered that KM repay $250,000 of what had been transferred to her. The court also found that KM breached her fiduciary duty to JC, with money being spent reportedly on behalf of JC, but without any evidence to support that. As a result, an additional $84,289 that KM could not account for had to be returned as well.
At Derfel Estate Law, our Toronto estate lawyers can help you protect the financial, health, and personal interests of your loved ones. We provide strategic and compassionate advice and will take the time to thoroughly understand your specific concerns and desired outcome, and will act accordingly, while making sure all relevant parties are protected throughout the process. Call us at 1-844-2-DERFEL or contact us online to schedule a consultation.