Think an Attorney Is Misusing a Living Parent's Money in Ontario?

It is upsetting to suspect that someone your parent trusted is spending your parent's money on themselves. Your parent is still alive, so the estate rules that apply after a death do not fit here. Different tools apply.

This article explains what an attorney under a continuing power of attorney for property owes your parent, how incapacity is judged, and the main routes in Ontario: asking for accounts, contacting the Public Guardian and Trustee, and applying for a guardian of property. It does not cover recovering money after a death.

What the attorney owes your parent

A power of attorney for property lets your parent name someone to handle their finances. An attorney can start making financial decisions immediately unless the document says otherwise. A continuing power of attorney is one that says the authority can be used while the grantor is incapable of managing property.

Once the grantor is incapable, the guardian's duties apply to the attorney. Those duties include:

• Acting as a fiduciary, diligently, honestly and in good faith.
• Keeping accounts.
• Liability for damages if they breach their duty.

Whether a particular power of attorney is in effect now, or only on incapacity, depends on its own wording. Some take effect on a set date or a stated event. If a document takes effect on incapacity but gives no way to decide it, it takes effect when the attorney is notified in the prescribed form by an assessor that the grantor is incapable, or that a certificate of incapacity has been issued.

What incapacity to manage property means

A person is incapable of managing property if they cannot understand information relevant to decisions about their property, or cannot appreciate the reasonably foreseeable consequences of a decision or of making no decision. Getting older, or having a diagnosis, does not by itself answer that question.

Capacity assessors are trained health professionals, such as doctors, nurses, psychologists, social workers and occupational therapists. An assessment cannot be done if the person refuses, unless a court orders it, and usually the person who asked for the assessment pays the assessor.

This matters because the stronger duties and several of the remedies below are tied to the grantor being incapable. A lawyer can help you think about whether and how to deal with the capacity question in your family's situation.

Asking the court for an accounting

The court may order an attorney to pass all or part of their accounts. The attorney, the grantor, the people listed in the Substitute Decisions Act, including a dependant of the grantor and the Public Guardian and Trustee, or others with the court's permission (leave) can apply. Whether you would need leave depends on your situation, so it is worth confirming with a lawyer.

Passing accounts puts the attorney's records in front of a judge. It is a way to see where money went before deciding on stronger steps.

The attorney may take compensation under a fee scale: 3 per cent on capital and income receipts, 3 per cent on capital and income disbursements, and three-fifths of 1 per cent of the annual average value of the assets as a care and management fee. These amounts can be adjusted when accounts are passed. Use the scale as a rough check against what the accounts show, not as a guarantee of what is allowed.

Reporting to the Public Guardian and Trustee

The Office of the Public Guardian and Trustee (OPGT) must investigate any allegation that a person is incapable of managing property and that serious adverse effects are occurring or may occur. Serious adverse effects include loss of a significant part of the person's property. The investigations line is 1-800-891-0504.

There are limits. The OPGT may investigate only if no alternative solution can be found, and it has no authority to make decisions for the person during an investigation or while the matter is before the courts. It is not a fast fix for every worry.

Applying for a guardian of property

The court may appoint a guardian of property for an incapable person on anyone's application. The appointment ends a continuing power of attorney. This is a significant step because it replaces the person your parent chose. How a court would see your situation depends on the facts, so it is worth confirming with a lawyer.

What to do next

• Write down what worries you, with dates, amounts and who told you.
• Gather what you can lawfully see: the power of attorney, bank statements you have access to, and notes of conversations.
• Do not confront or accuse before you understand the options, since money can be moved.
• Consider whether your parent's capacity has been assessed, and by whom.
• Call the OPGT investigations line if you believe serious loss is occurring.
• Speak with a lawyer about leave to apply, accounts and guardianship.

Frequently asked questions