Tag: power of attorney
Right from the start, 2021 is starting to look like it will be another extraordinary year of historic significance. In the world of estates, trusts, and capacity litigation, there was a decision released on January 5th where serious breaches of fiduciary duty by an attorney for property were found and the PGT was ordered to take over. The facts in Public Guardian and Trustee v. Cherneyko et al, 2021 ONSC 107, read like a law school case study and the reasons are worth noting.
Jean Cherneyko is a 90 year old woman. Jean did not have any children of her own. Her closest known relative was a niece in the US. By the time of the PGT application, Jean was in a long term care home. Prior to that, Jean lived alone in the same home that she had lived in since 1969. Jean had a friend named Tina who she had known for about five years. On August 15, 2019, Jean and Tina went to a lawyer’s office. Jean named Tina as her attorney for property and personal care. Jean also made a new Will which named Tina as the estate trustee and sole beneficiary of her estate. A week or so later on August 27th, Jean and Tina went to Jean’s bank where $250,000.00 was transferred to Tina, and $195,329.50 was transferred to Jean’s niece. Days later on August 31st, Jean was hospitalized for acute delirium and progressive cognitive decline. During Jean’s admission, Tina noted that Jean had become increasingly confused over the prior few months and that Jean exhibited lethargic behaviour and complained of bodily soreness. On September 1, 2019, Jean was diagnosed as being cognitively impaired. Thereafter, Jean was transferred to long term care on October 1st based on Tina’s authorization as Jean’s attorney for property. Short time after that, Tina’s son moved into Jean’s home and the PGT started to investigate in March, 2020 when the bank froze Jean’s accounts.
As a result of their investigation, the PGT brought an application to remove and replace Tina as Jean’s attorney for property. The PGT also sought to set aside the $250,000.00 transfer to Tina and the return of various other sums that were received by Tina, which totalled approximately $350,000.00.
First, the Court found that the transfer of $250,000.00 to Tina was not a gift. Tina failed to rebut the presumption of resulting trust for the gratuitous transfer. Tina put forth evidence that there was a bank manager who spoke to Jean at the time of the transfer, and that the banker told Jean that she would have still have enough money to live after the transfers to Tina and the her niece. This evidence was tendered through Tina’s affidavit without any direct evidence from the banker. The Court disregarded Tina’s reliance on the banker’s involvement because Tina herself had deposed that Jean was having “moments of delirium and irrationality, her condition fluctuated between lucidity and confusion” in late August, 2019 (para. 31) and there was no evidence that the banker was informed.
The Court also seriously questioned whether any of the payments to Tina were truly what “Jean wanted” because Jean’s power of attorney for property clearly stated that there was to be no compensation. The Court agreed with the PGT’s contention that Tina should not have paid herself $2,000.00 per month in compensation and on how that sum was unreasonably high given that Jean’s long term care costs were only $2,701.61 per month.
The value of the transfers, which was about a quarter of Jean’s net worth at the time, when considered in the context of Jean’s September 1st diagnosis also led the Court to find that Jean lacked capacity to gift Tina such a substantial sum.
The Court’s focus on context, timing, and proportionality as benchmarks in its analysis are very important for litigators and advisors to keep in mind.
Stayed tuned this week for Part 2 on Cherneyko: the breaches of fiduciary duty.
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In July, my colleague Paul Trudelle discussed the Virtual Signing of Wills, noting that in response to the COVID-19 pandemic, the Ontario government introduced an Order in Council specifically dealing with the execution of Wills and Powers of Attorney.
On December 10, 2020, pursuant to Ontario Regulation 458/20: Extensions of Orders under the Reopening Ontario (A Flexible Response to COVID-19) Act, virtual signing of Wills and Powers of Attorney have been extended until January 20, 2021 in Ontario.
Ontario Regulation 129/20: Signatures in Wills and Powers of Attorney among other things, provides the following:
1. The requirement for a testator or witness to be present in each other’s presence for the making of a Will (or Power of Attorney) may be satisfied by means of audio-visual communication technology, with certain restrictions.
2. “Audio-visual communication technology” means any electronic method of communication in which participants are able to see, hear and communicate with one another in real time.
3. At least one person who is providing services as a witness must be a licensee within the meaning of the Law Society Act at the time of the execution of the Will (or Power of Attorney).
4. The signatures or subscriptions may be made by signing or subscribing complete, identical copies of the Will (or Power of Attorney) in counterpart, which together shall constitute the Will (or Power of Attorney).
5. For this purpose, copies of a Will (or Power of Attorney) will be considered identical even if there are minor, non-substantive differences in format or layout between the copies.
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The highly anticipated COVID-19 vaccine is being rolled out in Ontario, with some of the first shots having already been administered yesterday. The University Health Network in Toronto and The Ottawa Hospital will be the first to administer the vaccine. Frontline healthcare workers in hospitals, long-term care homes, and other high-risk settings will be given priority. Vaccinations are expected to expand to residents in long-term care homes, home care patients with chronic conditions, and First Nation communities and urban Indigenous populations later in the winter of 2021. The province has not said when vaccines will become available for every Ontarian who wishes to be immunized. However, once available, the province confirms that vaccines will not be mandated but strongly encouraged.
The mass administration of the COVID-19 vaccine could be a real game changer in the battle against coronavirus. However, a recent public opinion poll conducted by Maru Blue shows that only one-third of Canadians would take the vaccine immediately, about half of Canadians would bide their time to assess its safety or use, and the rest have no intention of getting the shot at all. So it appears that Canadians are somewhat divided on the question of whether and when to get vaccinated.
Given the difference of opinion regarding this new vaccine, it is not inconceivable that multiple substitute-decision makers (SDMs) could disagree on whether to give or refuse consent to the shot on behalf of an incapable person. How would such a disagreement be resolved?
First, it is important to note that Ontario’s capacity legislation sets out a hierarchy of SDMs. Pursuant to section 20 of the Health Care Consent Act (HCCA), the guardian of the person is at the top of this hierarchy, followed by an attorney for personal care, representative appointed by the Consent and Capacity Board (CCB), spouse or partner, parent or children, siblings, any other relatives, and lastly the Public Guardian and Trustee (PGT). The decision of the highest ranking SDM will prevail over dissenting opinions from those who are lower on the hierarchy.
If there are multiple equally ranked SDMs acting with respect to a particular decision, they all have to be in agreement – the majority does not rule. If the SDMs fail to reach a consensus, any of the SDMs could apply to the CCB to try and be appointed the sole representative to make the decision. However, this option is not available where the incapable person already has a guardian of person or attorney for personal care. Another option is for the SDMs to attend mediation to try to come to an agreement. If mediation is not successful, the health practitioner must turn to the PGT for a decision. Section 20(6) of the HCCA states that the PGT is required to act and cannot decline to act in this situation.
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I just checked the news, and it appears that “voting” is a hot topic right now.
A question then occurred to me: Can an attorney under a Power of Attorney vote in a public election on the grantor’s behalf?
Under Ontario’s Substitute Decisions Act, 1992, s. 7(2), a power of attorney may authorize a person “to do on the grantor’s behalf anything in respect of property that the grantor could do if capable, except make a will.” Under s. 46(1), a person may give a written power of attorney for personal care, authorizing the person or persons named as attorneys to make, on the grantor’s behalf, decisions concerning the grantor’s personal care.
However, voting in a public election is considered to be an act that is personal in nature to the individual and not something that can be done by an attorney under a power of attorney.
(Not all voting by an attorney is prohibited: An attorney may have the ability to vote in the place of the grantor in a corporate context.)
According to the website “Probate Stars”, in most US states, voting by attorney is not allowed. In some states, for example, Florida and Arizona (gotta love Arizona), legislation expressly prohibits an attorney from voting on behalf of the grantor.
In other states, voting by attorney is presumed to be not allowed, as voting is considered to be an act that is “personal” in nature, and cannot be delegated. Quoting from a Tennessee appeals court decision of Rich Printing Co. v. Estate of McKeller (citation not given):
It is axiomatic that an agency may be created for any lawful act and that whatever a person may lawfully do, if acting in his own right and in his own behalf, he may delegate that authority to an agent. It is also axiomatic that authority cannot be lawfully delegated which is illegal, immoral or opposed to public policy, nor can one delegate an act which is personal in its nature, such as designating an agency to perform a personal duty or a personal trust. Of course an elected officer cannot delegate one to hold the office to which he has been elected in the absence of statutory authority so to do, nor to cast his vote for him.
In Ontario, it would appear that this reasoning applies as well.
Even though an attorney cannot vote for the grantor, it may be possible for the grantor to authorize someone to vote on their behalf through a proxy in limited circumstances. For example, there is a reference to proxy voting in the “Voter’s Guide for Ontario Municipal and School Board By-elections 2016-2018”. The Guide confirms that an attorney cannot vote on behalf of the elector, but a properly appointed proxy can.
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In Ontario, a Continuing Power of Attorney for Property or a Power of Attorney for Personal Care must be signed by two witnesses. As our readers also know, as a result of COVID-19, witnessing and execution requirements for Powers of Attorney in Ontario have been relaxed to facilitate access to incapacity planning during the pandemic. These provisions have recently been extended to November 21, 2020. Provided that one witness to a Continuing Power of Attorney for Property or Power of Attorney for Personal Care is a licensee under Ontario’s Law Society Act, the document may be witnessed using audiovisual communication technology and signed in counterpart. The document does not otherwise need to be witnessed by a lawyer (although, where a lawyer has assisted in the preparation of Powers of Attorney, it will often be most practical for the lawyer and one of his or her staff to witness the client’s execution of the document).
Especially in light of social distancing measures, it is important to keep in mind the restrictions on who can witness incapacity planning documents. In Ontario, neither a Continuing Power of Attorney for Property nor a Power of Attorney for Personal Care can be witnessed by:
- the attorney or the attorney’s spouse;
- the grantor’s spouse;
- a child of the grantor;
- a person whose property/personal care is under guardianship; or
- an individual of less than eighteen years old.
If the lawyer him or herself is being appointed under the document, which is not an uncommon practice, the involvement of a second lawyer or a paralegal in the virtual execution and witnessing of the document(s) may be necessary.
In the Yukon, the witnessing requirements for Powers of Attorney are somewhat different. As it currently stands, in order for a Continuing Power of Attorney for Property (there referred to as an Enduring Power of Attorney) to be effective, a Certificate of Legal Advice must be provided by a lawyer. As a result, the lawyer typically witnesses the Power of Attorney, which is not otherwise valid. While only one witness is required, the lawyer providing the Certificate cannot be the attorney or the attorney’s spouse.
A recent article from Canadian Lawyer reviews proposed changes to Yukon’s Enduring Power of Attorney Act. One of the key amendments is the replacement of the requirement that a lawyer be involved in witnessing the execution of Continuing Powers of Attorney for Property with the option of the witnessing of such documents by two other individuals. Similar to the requirements in Ontario, a witness must be an adult and cannot be the spouse of the donor, the attorney, or the spouse of the attorney.
If approved, the recent Yukon Bill will eliminate the necessity that a lawyer be involved in the witnessing of Powers of Attorney to increase access to incapacity planning throughout the territory.
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I have previously blogged about Vanier v Vanier, a decision of the Ontario Court of Appeal relating to a dispute amongst attorneys, in which the Court of Appeal agreed with a statement by the motion judge that the attorneys had “lost sight of the fact that it is [the incapable’s] best interests that must be served here, not their own pride, suspicions, authority or desires”. Unfortunately, it is often the case that in disputes amongst family members over the management of an incapable family member’s care or property, the incapable’s interests may be overshadowed by the fight amongst the other members of the family.
The recent Ontario Superior Court of Justice decision in Lockhart v Lockhart, 2020 ONSC 4667, appears to be another similar situation.
The applicant, Barbara, and the respondent, Robert, are children of Mrs. Lockhart. Mrs. Lockhart was 89 years old at the time of the decision. A number of years before, she had contracted bacterial meningitis and had suffered some long-lasting effects that impacted her cognition. Mrs. Lockhart’s husband predeceased her on October 2, 2018. Prior to his death, he had made personal care and treatment decisions for Mrs. Lockhart when she was not able to do so herself. After Mrs. Lockhart’s husband’s death, Barbara was unable to locate a power of attorney for personal care for Mrs. Lockhart; accordingly, Barbara and Robert proceeded to make personal care decisions on Mrs. Lockhart’s behalf, jointly.
However, in December 2018, Robert arranged to have Mrs. Lockhart sign a power of attorney for personal care and a power of attorney for property naming him as her sole attorney (the “2018 POAs”). Barbara was not aware of the 2018 POAs, and was not involved in their preparation or execution. Barbara did not even become aware of the 2018 POAs until April 2020 when Robert revealed them to her in the midst of a dispute between Barbara and Robert relating to Mrs. Lockhart’s care. Barbara subsequently challenged the validity of the 2018 POAs on the basis that, among other things, Mrs. Lockhart was not capable of granting them.
The court found that the 2018 POAs were of no force and effect, and were void ab initio. The court was also asked to determine which of Barbara and Robert would be authorized to make decisions on Mrs. Lockhart’s behalf under the Health Care Consent Act, 1996 (the “HCCA”). Each of Barbara and Robert took the position that they should have sole decision-making authority.
Notably, the court stated specifically that “[t]his dispute has less to do with Mrs. Lockhart’s interests and more to do with a power struggle between two siblings.” Given this outcome, and the facts leading to the litigation, I found the solution arrived at by the court interesting. The court determined that both Barbara and Robert are authorized to make personal care, health care, and treatment decisions under the HCCA, on behalf of Mrs. Lockhart, jointly. It appears that the court was satisfied that both of Barbara and Robert would exercise that authority in Mrs. Lockhart’s best interests, notwithstanding the dispute between them that lead to litigation. Other than the major disagreement between Barbara and Robert that lead to the litigation, the court found that “it appears that they have, in the main, come to decisions that have been in Mrs. Lockhart’s best interest and have kept her safe.” This historic ability to make joint decisions seems to have been sufficient for the court to decide that Barbara and Robert should continue doing so going forward.
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As we age, many of us begin to experience the normal consequences of aging, including some memory loss. Unfortunately, many of us may end up suffering from Alzheimer’s and related dementias. As a result, capacity has become a bigger problem among seniors.
There are ways to manage decision-making for a senior who has lost capacity to make his or her own decisions about care or property. If the person executed a power of attorney, their attorney can step in. If there is no power of attorney, a guardian can be appointed by the court. However, the imposition of a substitute decision maker can be a significant restriction on an older adult’s liberty, and some seniors may resist that imposition.
An article in The Walrus earlier this year considered this issue, and the impact a finding of incapacity can have on a senior’s autonomy in Canada.
One of the concerns discussed in the article is that “some seniors find that, once declared incapable, they are unable to challenge the decision.” In Ontario, we have the Consent and Capacity Board, which is an independent tribunal that, among other things, reviews various determinations regarding an individual’s capacity. However, this is apparently a rarity in Canada. The only other similar body is located in the Yukon.
Another issue raised by the Walrus article is with the lack of a standardized system for assessing capacity. The person doing the assessment can vary (doctor, nurse, social worker, etc.), as well as the tests conducted. This is made even more complicated by the fact that there are differing levels of capacity for different tasks (e.g. making a Will, managing property, getting married, granting a power of attorney for personal care).
Unfortunately, the lack of attention paid to the issue of aging and capacity appears to be systemic. As cynically, but perhaps also realistically stated in the Walrus article: “It can seem like a great deal of attention is paid to other institutions that house vulnerable segments of the population, such as children in daycares. But there’s no future in aging; there is next to no potential that a senior might one day cure cancer or be the next prime minister. Reform in elder care may be desperately needed, but it hasn’t been forthcoming.”
There is a fine balance to be struck between restricting seniors’ autonomy, and protecting vulnerable people. A collaborative “supported decision-making model”, as discussed in the article may be one way of doing this. I hope that as more attention is drawn to these issues, there will be greater awareness, and increased progress and reform for our seniors.
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The job of being an attorney for personal care for an incapable person is not an easy one. The attorney often has to make difficult decisions regarding an incapable person’s medical care and treatment, personal care, food, clothing, and shelter. A particularly difficult decision that can arise in the case of older adults is the decision of whether an older incapable person should be placed in a retirement or long-term care home.
I recently came across a decision that considered a personal care attorney’s decision to move his mother, Ann, into a long-term care facility. As set out in Corbet v Corbet, 2020 ONSC 4157, prior to the move, Ann had been living with her personal care attorney’s son (Ann’s grandson), and his spouse. The personal care attorney lived in the USA. The grandson and spouse were the defendants to an action brought by the personal care attorney, and the defendants had brought the motion that was dealt with in the decision. The motion sought an order that Ann return to live with the defendants.
The Corbet decision discussed the powers and duties of an attorney for property, as governed by the Substitute Decisions Act, 1992, S.O. 1992, c. 30 (the “SDA”). Section 66 of the SDA provides that a personal care attorney must exercise his or her powers and duties diligently and in good faith. If the attorney knows of prior wishes or instructions of an incapable person, they shall make their decision in accordance with those prior wishes or instructions. If the attorney does not know of a prior wish or instruction, or if it is impossible to make the decision in accordance with the wish or instruction, the attorney shall make the decision in the incapable person’s best interests. Although making a determination of what is in the incapable person’s best interests can be difficult, the SDA does set out the factors that the attorney must consider, as follows:
- the values and beliefs that the guardian knows the person held when capable and believes the person would still act on if capable;
- the person’s current wishes, if they can be ascertained; and
- the following factors:
- (i) Whether the guardian’s decision is likely to,
- improve the quality of the person’s life,
- prevent the quality of the person’s life from deteriorating, or
- reduce the extent to which, or the rate at which, the quality of the person’s life is likely to deteriorate.
- (ii) Whether the benefit the person is expected to obtain from the decision outweighs the risk of harm to the person from an alternative decision.
- (i) Whether the guardian’s decision is likely to,
Ultimately, the court determined that it was not prepared to grant the order sought by the defendants. Some of the factors that were determinative included the following:
- Ann had entrusted her only son as her attorney for personal care.
- The court should not attempt to micromanage an attorney’s day-to-day handling of an incapable person’s affairs unless there is clear evidence the attorney is not acting in good faith.
- Before making the decision to move Ann to the long-term care facility, the attorney consulted with Ann’s family doctor, and had a comprehensive assessment of the defendants’ home done by the LHIN case manager.
- Although Ann had expressed that she wanted to “go home”, the court found that Ann perceived her home as the home she had shared with her late husband, and not the defendants’ home.
- There was no evidence that the personal care attorney failed to consider the best interests criteria as set out above.
- There were allegations that the defendants had mistreated or neglected Ann, and that they had misused or misappropriated her money. As a result, it remained to be determined whether they were “supportive family members” with whom the attorney has a duty to consult under the SDA.
Attorneys for personal care would be well-advised to carefully consider their decisions, in light of the guidelines set out in the SDA, and to document their considerations in making decisions on behalf of an incapable person.
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Sometimes there is a grey area when it comes to a person’s loss of capacity, and the time when his or her attorney for property first began to act on an incapable’s behalf. In such a situation, it can be difficult to determine the starting date for an attorney’s fiduciary accounting period.
The recent decision of The Public Guardian and Trustee v Willis at al, 2020 ONSC 3660, dealt with this kind of situation. One of the issues was whether the respondent should be required to pass his accounts for the period before he became the attorney for property for his mother, Mrs. Willis.
The respondent was his mother’s only living child, and was acting as her attorney pursuant to a power of attorney for property dated May 2, 2018. Mrs. Willis was assessed as incapable of managing her property in September 2018, but the decision notes that she had been “clearly suffering from some cognitive deficits prior to June 2018”.
The Public Guardian and Trustee (the “PGT”) sought to have the respondent provide an accounting back to January 1, 2015, because the respondent had arranged several mortgages on his mother’s behalf in that period. The respondent, however, only agreed to pass his accounts starting from May 2, 2018 when he became his mother’s attorney for property. One of the main reasons that the respondent did not want to pass his accounts prior to that period was due to the expense, because it was clear that Mrs. Willis was insolvent, and the respondent would likely have to personally bear the costs of passing his accounts. The PGT clarified during the hearing that it was not seeking court format accounts for the period from 2015-2018, but only “justifiable explanations of money coming in and out of his mother’s RBC account and how mortgage advances were spent plus all relevant disclosure.”
The court found that the respondent had assisted his mother with paying bills and arranging mortgages prior to the time that she was assessed as incapable. It was also noted in the decision that there was “no doubt” that even while Mrs. Willis was capable, she was unsophisticated, vulnerable, and relied on the respondent. The respondent also had access to his mother’s bank account before January 1, 2015.
The court held that, even if an individual is not specifically appointed in a fiduciary role (such as an attorney) one must look at the types of duties that the individual was carrying out to determine if they were acting in a fiduciary capacity. On this basis, the court found that the respondent had been acting as a fiduciary for Mrs. Willis for some time, and determined that he should provide detailed explanations of financial transactions upon the PGT’s request from January 1, 2015 to May 1, 2018 (in addition to the passing of accounts to which the respondent had consented starting from May 2, 2018).
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As of April 7, Wills can be witnessed by video conference.
As you are aware, two witnesses must be “in the presence of” the testator when a typed Will is signed. This has historically required physical presence.
The new Emergency Order now confirms that the “presence” may be by “audio-visual communication technology”.
Importantly, at least 1 of the 2 witnesses must be a licensee of the Law Society of Ontario.
In light of these changes, we, together with Hull e-State Planner, have created a suggested Video Execution Checklist to use for execution of wills in these circumstances.
Click here to access the Checklist and further information about the Emergency Order.
Feel free to reach out with any questions,