Estates & Wills & Trusts

Choose wisely when appointing a power of attorney

By AdvocateDaily.com Staff

With financial abuse of elders on the rise, Toronto trust and estate litigator Felice Kirsh tells AdvocateDaily.com it’s important to choose wisely when appointing a power of attorney (POA) for property.

Relatives or friends taking advantage of seniors isn’t a new phenomenon, and there’s no one-size-fits-all strategy to mitigate it, but there are guidelines to help people avoid the disastrous consequences of making a bad choice, she says.

“In many cases, parents will choose one or more of their children, and while that sounds fair and reasonable in theory, it can create problems,” says Kirsh, a partner with Schnurr Kirsh Oelbaum Tator LLP, which represents beneficiaries, estate trustees, estate claimants and attorneys under powers of attorney in a wide range of disputes and litigious matters.

Acting as a POA can be a time-consuming and challenging role, and Kirsh suggests it shouldn’t be regarded as a popularity contest.

“Most people don’t want this job; it’s not easy and looking after someone’s financial affairs can take a fair amount of time. You have to maintain a record of every penny, so if you spend $120 on groceries at Metro, you need to keep that voucher. That’s something most people don’t understand. So five years down the road when mom is no longer here and there’s an accounting of the finances, it’s a disaster,” she says.

In the spirit of fairness, parents often appoint two or three children, even though they know there’s dissension in the ranks, and that’s asking for trouble, she says.

“I completely acknowledge it’s hard for parents to pick one child over another, but in a situation where you appoint three children and decisions are made on a majority-rules basis, it can make the administration much more cumbersome and time-consuming — especially if the children don’t get along,” Kirsh says, noting that such a setup also makes it more difficult when dealing with financial institutions.

It’s also important to consider logistics when selecting the person who will manage the financial aspects of your life in the event you’re no longer able, she adds.

“If mom appoints both her son who lives in Sudbury and her daughter in Toronto, how is that going to work? They may have to open a bank account or sign documents, so it really doesn’t make sense to appoint people who don’t live within reasonable driving distance of each other,” she says.

One scenario in particular that comes up repeatedly is that of an adult child who lives with the parent and is granted the POA for their property, Kirsh points out.

“It’s challenging to sort out the facts of these types of cases because often the child is living in the house rent-free and using his parent's money to pay for groceries, utilities and the like. He may use the parent’s funds to make improvements to the house, knowing he will be receiving it in the will,” she says.

In an ideal scenario, Kirsh says a surviving spouse would discuss the proposition with the children to ensure they understand the tasks involved and their obligations.

“Ideally the family would sit down with a lawyer so everyone understands what's expected. The problems arise when people do things in secret, appointing one child without telling the other, and depending on the family dynamics, it could raise suspicion with the other children.”

Those who suspect a misuse of POA should take immediate action, suggests the National Institute for the Care of the Elderly:

  • If you are mentally capable, cancel your power of attorney and demand a full accounting.
  • You can demand a full accounting of your financial affairs at any time.
  • If theft is involved, call your local police.
  • If you are mentally incapable and someone else has evidence suggesting mismanagement or theft, they can call the Office of the Public Guardian and Trustee.

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