A power of attorney essentially transfers decision-making authority about your legal and financial affairs to another individual. These are used in many circumstances, namely to ensure that your well-being and financial circumstances are protected if there is any incapacity.

Zagorac v Zagorac 2022 ONSC 3733

In Zagorac v Zagorac, a dispute arose between a brother and sister over their mother’s power of attorney. The mother suffers from corticobasal syndrome, a rare neurodegenerative disease whose symptoms are similar to Alzheimer’s symptoms.

In 2015, the mother executed a will along with powers of attorney, appointing her son, Ivan, as her power of attorney for property and all her children as joint powers of attorney for personal care. In 2017, Ivan noticed an increase in his mother’s expenditures and became concerned about the possibility that his sister, Nina, was mismanaging his mother’s assets. Nina denied that she had misused her mother’s funds and took offence at the fact that her caregiving of her mother was being challenged.

In 2019, Ivan had increasing suspicions about his sister’s financial decision-making on behalf of their mother given her own history of personal money mismanagement. Consequently, Ivan commenced an Application to the court for a declaration that his mother was incapable of managing property and personal care. In response, Nina changed her mother’s bank password, phone number and locks and took her mother to a lawyer to obtain new power of attorney’s documents which named her as the powers of attorney for property and personal care for her mother. Ivan challenged the validity of the 2019 powers of attorney and while the daughter agreed that the 2019 powers of attorney were invalid, she argued that her mother did not have capacity and was unduly influenced to execute the 2015 powers of attorney.

In 2021, the Court ordered that the mother undergo a capacity assessment, including a capacity assessment back to 2015. The assessment concluded that the mother was suffering from dementia by 2015 and has had a precipitous decline in cognitive and physical functioning. The medical evidence concluded that the mother was in the early dementia stage of her illness, but still able to execute a power of attorney for property and personal care. As the mother’s health and capacity continued to decline, her health care workers advised that she was no longer safe at home and must be moved to a long-term care facility.

The Court was highly critical of Nina’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 beginning in 2016 and into the making of the 2019 powers of attorney.

Applying the facts in this case to the enumerated factors indicative of undue influence in Gironda, the judge found as follows:

a.      The mother was not dependent solely on Nina in 2015 when she signed the 2015 power of attorney’s. Ivan was still living with her at that time. Any influence from her children at that time would have been equal.

b.      There is no medical evidence to show that the mother was unfit to give instructions to her lawyer

c.      The 2015 power of attorney’s were not inconsistent with any prior documents. The evidence is that this is the first time that the mother signed any Estate Planning documents.

d.      It was solely Nina who located and took her mother to ACE for the 2017 Revocations. It was solely Nina who located and took her mother to a lawyer for the 2019 power of attorney’s.

e.      The lawyer’s notes of drafting the 2015 power of attorney’s confirm that the mother was always interviewed alone to confirm her instructions and understanding. In contrast, it is clear from the notes from the ACE that Nina provided almost all of the information for the 2017 revocations. She also provided all relevant background information when drafting the 2019 power of attorney’s.  

Based on the doctor’s capacity assessment and lawyer’s notes, the Court held that the mother had the capacity to execute powers of attorney in 2015 and these were valid, giving the son decision-making authority.

As we can see from this case, challenging a power of attorney requires sufficient evidence and reminds lawyers that detailed notes are critical.

Thanks for Reading,

Sara