What to Do If Someone Abuses a Power of Attorney in Manitoba

You may have noticed that a parent's money is disappearing, bills are going unpaid, or the person managing their affairs will not explain what is happening. Suspecting misuse of a power of attorney is stressful, especially when the attorney is also family.

This article explains what The Powers of Attorney Act expects from an attorney and what to gather before you act. It does not set out every court or reporting step, so a lawyer can confirm the best route for your situation.

This article covers the law of Manitoba.

What an attorney is allowed and expected to do

The person who gives the power is the donor, and the person authorized to act is the attorney. An uncompensated attorney must use the judgment of a prudent, discreet and intelligent person managing their own affairs. A compensated attorney must meet the standard of a prudent professional managing other people's property.

If the donor appointed more than one attorney, they may act jointly or successively. If the document does not say which, they act in the order named. Joint attorneys act by majority, and absent a contrary provision the first-named attorney decides a deadlock.

In the Act, mental incompetence means a person's inability to manage their affairs. This matters because an enduring power is the kind that keeps working after that point, so the donor may be least able to notice or raise a problem.

Warning signs

• Unexplained withdrawals, transfers or changes to bank accounts.
• Unpaid bills, or care and living costs that are no longer being met.
• The attorney refusing to share any information or records.
• The attorney spending on themselves, or moving the donor's property into their own name.
• Isolation of the donor from family and friends.

These signs do not prove wrongdoing. There may be an innocent explanation, so the aim at first is to understand what has happened.

Check whether the power is valid and still in force

An attorney's authority may be questioned in several ways. A power of attorney continues despite the donor's mental incompetence only if it is in writing, signed by the donor (or acknowledged) in a witness's presence, signed by the witness in the donor's presence, and states that it continues despite mental incompetence. An enduring power is void if the donor could not understand its nature and effect when signing.

The attorney must also have been eligible at the time the donor signed: an adult, mentally competent, and not an undischarged bankrupt. A power ends if the attorney dies, becomes bankrupt or becomes mentally incompetent, and it terminates when the donor dies. After a death, the attorney is not liable to the donor or estate for acting after termination if they did not know of it and with reasonable care could not have known. Acts in favour of a person who did not know of the termination remain valid.

Steps to take now

• Write down what you have seen, with dates and amounts.
• Collect copies of the power of attorney document and recent bank or account statements you are lawfully able to see.
• Ask the attorney calmly for an explanation and records, and keep a note of the response.
• Do not confront the attorney in a way that puts the donor at risk or leads to records being destroyed.
• If the donor is in danger or at immediate risk, contact the police or emergency services.

Whether a person can demand a formal accounting, who should receive a report, and what the court can order are questions that depend on the facts and on who you are in relation to the donor. This is where a lawyer's advice is most useful.

What to do next

Talk to a lawyer promptly, bring your notes and documents, and ask what court options, reporting routes and protective steps are available. If the donor has died, the estate's personal representative and any survivor's rights may also come into play, and funds taken may need to be addressed as part of administering the estate.

Once the donor has died, the power of attorney has ended, and the estate is dealt with by its personal representative instead. Where the donor left a surviving spouse or common-law partner who may apply for an accounting and equalization under The Family Property Act, the personal representative must not distribute the estate until that survivor consents in writing, the time to apply has expired without an application, or an application is decided. Distributing contrary to this makes the representative personally liable for the survivor's loss.

Frequently asked questions