Power of Attorney Abuse in Ontario: What You Can Do

Watching a parent's savings shrink while another relative controls the money is distressing. You may not know if what you are seeing is misuse or just poor record keeping.

This article explains what an attorney under a continuing power of attorney must do, and the routes available if you suspect abuse in Ontario.

What an attorney is required to do

When the grantor is incapable, the attorney is held to the guardian's duties. These include acting as a fiduciary diligently, honestly and in good faith, keeping accounts, and liability for damages for breach of duty.

Attorneys may be paid. Under O. Reg. 26/95, compensation is 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. Compensation within that scale is different from taking money for personal use.

Whether a power of attorney is in effect yet depends on the document. An attorney under a property power of attorney can start making financial decisions immediately unless the document says otherwise. A continuing power of attorney may say it comes into effect on a set date or when a specified contingency happens. If it takes effect when the grantor becomes incapable but gives no way to decide that, 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.

A power of attorney is continuing if it says the authority can be used during the grantor's incapacity to manage property, and it is valid if the grantor was capable of giving it when it was signed. A continuing power of attorney must be signed in the presence of two witnesses, who each sign. The attorney, the attorney's spouse or partner, and anyone under 18 are among those who cannot witness. How the document was signed and when it took effect are sensible questions to raise with a lawyer.

Asking the court for accounts

An accounting is simply a record of what money came in, what went out and why. It is often the first thing that turns worry into facts, whether it shows careful management or something that needs more attention.

Under section 42 of the Substitute Decisions Act, the court may order an attorney to pass all or part of their accounts. The attorney, the grantor, the persons listed in s. 42(4) (including a dependant of the grantor and the Public Guardian and Trustee) or others with leave may apply.

If you are not on that list, you may still be able to apply with the court's leave. A lawyer can tell you whether you qualify.

Replacing the attorney: guardianship

The court may appoint a guardian of property for an incapable person on anyone's application, and the appointment ends a continuing power of attorney.

Capacity matters here. 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 lack of decision.

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. Usually the person who asked for the assessment pays the assessor.

The Public Guardian and Trustee

The Public Guardian and Trustee 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 office 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.

Having the facts organized, such as dates, amounts and who handled the money, makes it easier for anyone looking into your concern to understand it.

What to do next

• Write down what you have seen, with dates.
• Collect bank statements and any copy of the power of attorney you can lawfully obtain.
• Check what the document says about when it takes effect.
• Raise your concerns calmly and ask for an accounting.
• Call the Public Guardian and Trustee if significant property is at risk.
• Ask a lawyer about a court application to pass accounts or for guardianship.
• Act promptly if money is leaving quickly.

Every situation is different. How this applies depends on your facts, including what the document says and who you are in relation to the grantor, so it is worth confirming with a lawyer before you act.

Frequently asked questions