Choosing the Wrong Attorney for Property
Several recent matters before British courts highlight the damage that can be done when one appoints the wrong person as a continuing attorney for property.
One article tells the story of a World War II veteran and successful entrepreneur who executed a continuing power of attorney for property in favour of his trusted financial advisor. The abuse of the power of attorney by the advisor resulted in a ninety thousand pound depletion of the veteran’s assets, which had been inappropriately invested by the attorney in a high-risk venture after the grantor had lost the mental capacity to manage his own affairs. The veteran’s daughters applied to the court to replace the appointed attorney to manage their father’s finances, but were appointed only days before his death and too late to correct the financial mismanagement that had earlier taken place and resulted in the insolvency of the man’s estate.
In another case, heard earlier this month by the England and Wales Court of Protection, an attorney for property used seventy-two thousand pounds of his incapable mother’s money to fund the expansion of his partner’s house. After the attorney separated from his partner, the grantor’s great nephew raised his concerns with the Office of the Public Guardian. As the grantor lacked the mental capacity required to revoke the power of attorney herself, the Court did so on her behalf. The Court noted that, absent its intervention, the grantor would have been deprived of funds that she may later require to pay for personal care as she ages, because of her attorney’s actions.
In Ontario, the court may similarly intervene to appoint a guardian for property and/or personal care in the place of an attorney earlier appointed, who has abused the authority granted by the power of attorney in his or her favour. This can, however, be a slow and costly process.
When a power of attorney is being prepared, it is important that attorneys are chosen carefully. The assistance of a lawyer who is experienced with incapacity planning can assist in preventing the depletion of assets by a poorly-chosen attorney and the costs of related litigation. When drafted and used correctly, a power of attorney can be a powerful tool with the potential to allow a person to live with continued dignity into old age, regardless of diminished mental capacity.
Thank you for reading.