Tag: elder abuse
By all indications, the abuse of Powers of Attorney to misappropriate assets is on the rise.
When a grantor gives powers to an attorney to manage the grantor’s property, it allows the attorney to assist the grantor in managing property, and in fact to take over management of property altogether if the grantor does not monitor the situation. Often the very goal of the grantor is to allow someone else to completely take over management of one’s property due to age, potential incapacity or other reasons, so the grantor has no intention to monitor.
This is often a reasonable choice, and the law holds attorneys to a high standard to protect grantors. However, the potential for abuse is immense. Abuse can be willful or simply negligent, but in either case the damage can be devastating and irreversible. In many cases attorneys who stray from their duties are never made to account, although they have that obligation. Often they live with the grantor and have little or no oversight. The legal fees in securing justice are generally high, and the chances of recovering on a judgment can be low. In the result, legal proceedings might be impractical, however blatant abuse may be in a given case.
The best defence against this problem is awareness, so these varied results from a quick internet search are somewhat encouraging: a Florida law firm website; an excellent Vancouver Sun article; a synopsis of a TV news story; the New York Attorney General’s website; a news report of a Philadelphia trial; and a news release from Prince Edward Island’s provincial government commenting on the problem for World Elder Abuse Day.
This is the tip of a very large iceberg: by all indications lawyers, financial institutions, governments and of course the public will be wrestling with a growing problem for years to come.
Thanks for reading.
Listen to "Powers of Attorney and Elder Abuse"
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During Hull on Estate and Succession Planning Podcast #64, Ian Hull and Suzana Popovic-Montag express the importance of educating an individual chosen as Power of Attorney on their roles and responsibilities, as well as full disclosure between all parties involved in the estate planning.
They also discuss the issue of duelling Powers of Attorney during the succession planning process and the strategy of using Power of Attorney for limited purposes.
Ian and Suzana also touch on the problem of elder abuse and mentioned the helpful emergency hotline provided by the Public Guardian and Trustee at 1-800-366-0335.
In McMullen v. McMullen  B.C.J. No 2900, an 86 year old widower commenced an application against two of his three daughters, who held his power of attorney. The application was to set aside the transfer of a 99% interest in the father’s condominium property to the husbands of his two daughters. The daughters, in turn, brought an application for an order requiring their father to submit to a psychiatric assessment.
According to the medical evidence before the court, the father had some medical problems, but no documented cognitive problems. At worst, he suffered from depression. However, the two daughters alleged that their father’s spending habits had changed and his investments had been depleted. The daughters claimed that their father was sending money to a new female acquaintance in the United States. The family contacted medical professionals and legal authorities with concerns that their father was being financially abused, but to no avail.
When the daughters confronted their father with respect to his worsening financial situation, he became angry and denied he was being financially exploited. He asked his one daughter to stop monitoring his bank account though she did not accede to his request, as she considered it her duty under the power of attorney. The two daughters then transferred the father’s condominium property to preserve his only remaining asset and provide for his future care.
However, the daughters did not immediately register the transfer of the condominium property, as they thought it would cause emotional distress. It was not until a year later that the daughters finally registered the transfer of the condominium without telling their father or providing consideration. The father commenced the application when he ultimately discovered the transfer.
The court allowed the application by the father and the condominium transfer was declared null and void. While the daughters acted in what they considered to be in their father’s best interests, there was nevertheless no evidence to show that the father was incapable of managing his financial affairs. The daughters had therefore breached their duties as attorneys by acting contrary to their father’s intentions. The court dismissed the daughters’ application, as the father was not required to submit to a psychiatric assessment where his mental capacity was not an issue.
The case holds that even when a family fears that an elderly parent is being financially exploited, but mental incompetency is not an issue, a power of attorney does not give the family carte blanche to do what they think is in the best interests of that parent. A power of attorney for property has its limits even in the most egregious situations.
Justin de Vries
Hull on Estates Podcast #52 – Trying to Protect an Elderly Parent from Financial Exploitation; The Limits on Power of Attorney
Read the transcribed version of “Trying to Protect an Elderly Parent from Financial Exploitation; The Limits on Power of Attorney”
During Hull on Estates Episode #52, Justin de Vries and Megan Connolly discuss the central question in the case of a father and his children, McMullen v. McMullen: did the defendants improperly use their power of attorney when they transferred legal title to Mr. McMullen’s condominium from his sole ownership to their joint ownership?
Justin and Megan summarize the case and cover issues such as capacity, breach of fiduciary duty and elder abuse.
Picking up on our discussion of issues encountered in capacity litigation, a common scenario sees the Court asked to make inquiry into the relationship between the grantor and the attorney by a more “distant” sibling or relative (either geographically or otherwise).
Procedurally, in Ontario, leave of the Court must be sought under s. 42(4) of the Substitute Decisions Act to permit the Applicant to make application for an order compelling an attorney under a Power of Attorney for Property to pass his or her accounts.
The test for leave has been characterized in the unreported case of Ali v. Fruci  O.J. No. 1093 as twofold: (i) does the applicant have a genuine interest in the welfare of the grantor of the power of attorney?, and (ii) if leave were to be granted, is a court likely to order a passing of accounts?
The term “Elder Abuse” has become increasingly prevalent in the media over the past few years. The term means different things to different people. Television programs and feature articles in newspapers have occasionally chronicled tragic occurrences of physical mistreatment of residents of long-term care facilities.
Apart from such physical abuse and neglect of the elderly, financial abuse is also increasingly reported in the media. Terms such as “scam artist” and “predator” are commonly invoked to describe those who seek to defraud the elderly. Police forces in urban centres commonly have investigators exclusively assigned to the protection of the elderly (and others) from such threats. The Public Guardian and Trustee has a similar mandate in the civil context. In Toronto, the Advocacy Centre for the Elderly has the protection of the elderly as one of its mandates.