Rogue attorney under a power of attorney

“My dad, in his eighties, was forgetting to pay bills and misplacing pension cheques. My brother convinced dad to sign a power of attorney, appointing my brother as attorney. A few months later, my brother withdrew $100,000 of dad’s investments and spent it all on a timeshare and casino visits. Dad sank into a deep depression. We’re not sure how to recover the money.”

– Tanya, Burnaby, BC

A power of attorney allows a trusted person to be appointed to help with financial and legal matters. Simple and flexible, it’s a common tool used in advance planning. It can be part of the solution for an older adult who is struggling to manage their affairs. 

But it can also lead to problems. Misuse of a power of attorney is a common form of financial abuse of older adults — where someone they know misuses or tries to take their money or property. And the results can be devastating. A rogue attorney can bankrupt the older adult.

Misuse of a power of attorney can take many forms:

• Someone pressures an older adult to appoint them as their attorney, against the older adult’s wishes. 

• Someone has an older adult appoint them as their attorney, when the older adult doesn’t have the capacity to understand what they’re signing. 

• The attorney spends the older adult’s money on themselves rather than for the benefit of the older adult.

• The attorney does things the older adult didn’t authorize them to do — for example, sells their home, or makes gifts, or changes beneficiaries on insurance policies or retirement plans.

• The attorney denies the older adult access to their own funds.

Misuse of a power of attorney is not just a form of abuse. It can also be a crime. Under this section of the Criminal Code, an attorney commits theft when they fraudulently sell or dispose of property covered by the power of attorney — or use the proceeds for a purpose other than that for which they were entrusted.

Here’s an example of a case where someone was convicted of theft for misusing a power of attorney. After being appointed, the attorney moved into the adult’s home (the adult was in long-term care), treated it as if it was his own, used more than $300,000 of the adult’s money for his own benefit, and failed to pay the adult’s bills at his long-term care facility. The attorney was sentenced to two years in jail.

The quickest way to stop this abuse, assuming the older adult is capable, is to have the older adult revoke the power given. They can end their power of attorney at any time, as long as they're capable of understanding the nature and consequences of doing so. For how to do so, see below, under work out the problem.

If the older adult lacks capacity, they won’t be able to revoke their power of attorney. But other avenues are available to stop the abuse. 

Reporting the abuse to the Public Guardian and Trustee 

If a vulnerable adult is affected by misuse of a power of attorney, you can report it to the Public Guardian and Trustee. This provincial agency is responsible for protecting mentally incapable adults. They can investigate allegations of financial abuse involving an older adult who is incapable and at risk of suffering serious harm. 

The Public Guardian and Trustee has a range of powers to protect the vulnerable adult. They can ask the attorney to show how the adult's financial affairs are being managed. They can step in to freeze assets. They can take action to replace an attorney who is not fulfilling their legal duties. If needed, they can seek the legal authority to make financial decisions for the adult (by becoming what’s called a committee).

See below, under work out the problem, for how to report the abuse to the Public Guardian and Trustee.

Reporting the abuse to a designated agency

If the abuse is primarily related to non-financial matters, you can report it to a designated agency. These include the five regional health authorities in the province as well as Community Living BC (for adults eligible for these services). These agencies have a legal responsibility to look into the situation and talk directly with the adult, involving them as much as possible in addressing their situation. 

If the agency is concerned that financial abuse may be present, they can make a referral to the Public Guardian and Trustee. 

If you’re helping an older adult take steps to address financial abuse, these guiding principles provide some best practices. 

Ask the older adult to tell you about their experience. Listen carefully. Honour their independence as much as possible. Work with them to identify steps and support networks that suit their values. 

Most attorneys appointed under a power of attorney are family members, with no specialized training on the role. If possible, sit down with them to discuss concerns about their conduct. That’s the best way to preserve relationships, which can be worth even more than the money in dispute. Calling a family meeting can be a good way to encourage discussion.

The quickest way to stop this form of abuse is to have the older adult revoke the power of attorney. They can do this at any time, as long as they're capable of understanding the nature and consequences of doing so.

The decision to end a power of attorney must be in writing. No set form is required. The older adult can use wording like this:

Notice of revocation

I,__________________ [older adult’s name], revoke the power of attorney that I made on ___________ [date power of attorney was signed] that appointed the following people ________________ [name of the attorney(s)] as my attorney.

Date: _____________________

Signature: _________________

The older adult must sign and date the notice of revocation.

The revocation takes effect when the notice is given to everyone required. Or in the notice of revocation a date in the future can be specified when it will take effect. 

Depending on the seriousness of the abuse and the vulnerability of the older adult, you can reach out to the authorities to look into the situation. 

Contacting the police

If the financial abuse is ongoing or imminent, it may make sense to contact the police. For example, if there is concern about theft or misappropriation of funds.

You may face adversity when doing this — the police often suggest misuse of a power of attorney is a civil matter or family matter rather than a police matter. But theft by an attorney under a power of attorney is a crime (see above, under what you should know). Stand your ground on this point. You can highlight how the police have a role in preventing crimes.

Contacting the Public Guardian and Trustee 

If a vulnerable adult is affected by misuse of a power of attorney, you can report the abuse to the Public Guardian and Trustee. You can use this referral form.

As described above under what you should  know, this provincial agency is responsible for protecting mentally incapable adults. They can investigate allegations of financial abuse involving an older adult who is incapable and at risk of suffering serious harm. The agency has a range of powers to protect the vulnerable adult. These include asking the attorney to show how they’re managing the adult's financial affairs, and taking action to replace an attorney who is not fulfilling their legal duties.  

If other steps haven’t put an end to the financial abuse, you might consider legal action.

Under this BC law, a person who has reported concerns about financial abuse of an older adult to the Public Guardian and Trustee can apply to court to revoke an enduring power of attorney, or void all actions done under it. The Public Guardian and Trustee can also make this type of application.

Meanwhile, under this BC law, a person can apply to court for a ruling that a family member is mentally incapable of managing their affairs, and seek to be appointed as a committee. This would end any power of attorney. The committee would take over managing the person’s affairs, and would report to the Public Guardian and Trustee about how the finances are being managed.

The BC Supreme Court has jurisdiction over committeeship applications. To be appointed as a committee, the proposed candidate must submit, among other things, affidavits from two BC doctors swearing that the adult is mentally unable to manage their affairs.

As these kinds of applications are involved and complex family dynamics are often in play, getting legal advice is crucial. See below, under who can help, for some options.