Tag: Powers of Attorney Litigation
It is typically the case that a Continuing Power of Attorney for Property and/or Personal Care that is granted while the grantor is capable will survive for the life of the grantor, unless there is compelling evidence of misconduct or neglect. However, this was not the case in Corewyn v McCulloch, 2015 ONSC 6039. In this case, Justice Sweeny appointed the daughter of an incapable woman as guardian, despite the fact that there was a valid Continuing Power of Attorney in favour of the incapable woman’s husband and no evidence of misconduct or neglect.
Ena and her husband Bill had been married for over 32 years. Ena executed a Continuing Power of Attorney in favour of her husband in February 1999, and in 2007 Ena was diagnosed with Alzheimer Dementia and became incapable of managing her property and personal care. Although Bill was Ena’s Attorney for Property and Personal Care, he was not very involved in health and personal care decisions for Ena. Instead, Ena’s daughter Donna made many of the personal care decision on behalf of Ena with some consultation with Bill. Donna also provided Bill will personal care assistance.
Issues began to arise after Ena broke her hip and required additional care. After Ena broke her hip, Donna arranged for her to be moved to a new care facility where her personal care needs could better be meet. Donna also arranged for a personal support worker (“PSW”) to assist her mother on a daily basis for approximately 25 hours per week.
At the same time Bill executed Powers of Attorney in favour of Donna but soon became suspicious of Donna’s motive. He consulted with a lawyer and his daughter, Sara and made the decision to revoke the Powers of Attorney in favour of Donna and granted new Powers of Attorney to Sara.
In her capacity for Attorney of Property for Bill, Sara made the decision to reduce Ena’s personal support worker visits to two hours per day. This caused Donna to become concerned about her mother’s care and the decisions that Bill and Sara where making on Ena’s behalf.
On March 28, 2015 Donna and Sara made an agreement that resulted in Ena and Bill dividing their assets 50/50. Following this agreement, Bill withdrew $75,000 from a joint account held with Ena. Donna then took her mother to the bank to withdraw the remaining $19,000. Donna then commenced a guardianship application to be granted the legal authority to make personal care and financial decisions on behalf of her mother.
In accordance with sections 22(3) and 55(2) Substitute Decisions Act (“SDA”), Justice Sweeny was satisfied that Ena was incapable of making decisions regarding her property and personal care that such decisions could not be met by any alternative course of action.
In dealing with the issue of whether Bill’s Powers of Attorney should be terminated, Justice Sweeny acknowledged that to do so required clear evidence of misconduct or neglect, which was simply not present in this case. Nonetheless, Justice Sweeney cited case law that suggests that the courts may substitute a decision maker where a valid Power of Attorney no longer served the best interest of the incapable person.
In granting Donna’s application for guardianship, Justice Sweeny stated that in considering the best interest of Ena “the court must take into consideration the changing nature of a person’s needs and always focus on what is in the best interests of the person at the particular time the appointment is sought to be made…”
In considering the factors set out in section 24(5) of the SDA, Justice Sweeny held that Ena’s appointed had not only appointed Donna as her substitute Attorney for Property and Personal care but that Donna had acted as de facto Attorney Ena for numerous years with Bill’s knowledge. Further, she had always acted in Ena’s best interest. In light of these facts and sufficient evidence that Bill had not taken an active role in making decisions on Ena’s behalf, Justice Sweeny found it to be in the best interest of Ena to appoint Donna as guardian of the person for Ena.
This cases now suggests that the best interest an incapable person may be an additional factor to be considered when the court is asked to terminate a valid continuing power of attorney. Accordingly, solicitors should be mindful of this consideration when acting for an Attorney for Property or an Applicant in a Guardianship Application.
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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.
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