Powers of Attorney, Representation Agreements and Dementia

As our population ages and we live longer (according to the statistics, at least), it is increasingly common to prepare Powers of Attorney and Representation Agreements.

The relevant legislation changed about four years ago, making Powers of Attorney strictly for managing financial matters and Representation Agreements strictly for managing health care.

With cases of dementia rising across the country, these documents are more important than ever, giving the appointed person(s) the legal authority to look after the person and hopefully, in the process, avoid financial and personal abuse.

They are not perfect in this respect, but they are the best documents we have.

It is far less expensive to have these documents prepared than to seek a Court Order appointing a person Committee over a person’s finances and health care.

Earlier this week, reasons for judgement were released in the case Baker-MacGrotty v. Baker. This case was between siblings, both seeking to be appointed Committee over their mother and overturn a Power of Attorney and Representation Agreement, under which one of the siblings had been acting.

Facts
The two siblings, both adults (a son and daughter), had a mother (aged 84) unable to manage her financial affairs or her person.

She was diagnosed with Alzheimer’s disease several years ago. Her husband, father of the two siblings, died last year.

Around the time of the mother’s diagnosis, the son moved into their home following the breakup of his marriage. It was beneficial for everyone.

The son remarried in 2012, and remained in the basement of the house with his new wife.

In 2013, the mother appointed her husband and son as her Attorneys and Representatives. The father appointed the son as his Attorney and Representative.

After the parents moved into a care facility, in 2014, the son and his wife moved upstairs and rented out the basement suite.

The parents’ daughter was informed of the Powers of Attorney and Representation Agreements only later, by letter from the Solicitor. She was concerned because her sibling was excluding her from parental visits.

It was later discovered that the son was paying his parents less than market rent for occupying their house, and after becoming Attorney, he arranged the purchase of a fifth wheel using his parents’ money, some of which was borrowed.

The daughter brought on the application to be appointed Committee.

Court’s decision
The Court first expressed its concern that, at the time the son was Attorney and Representative under the documents, his mother was cognitively deficient.

The Lawyer who made the Power of Attorney and Representation Agreement was unaware that the mother had already been afflicted with Alzheimer’s disease for four years.

In addition, the Court found that the son was in a conflict of interest, living in his mother’s home and benefitting from a lower than market rent.

The Court terminated the Representation Agreement. The daughter was appointed Committee, and the Power of Attorney was also terminated.

Summary
Family disputes over the care of parents are too common and are unfortunate.

The parents, in this case, probably waited too long to do their incapacity planning.

The best time to plan is when you have full capacity. Years after an Alzheimer’s diagnosis is just too late.

This case reveals quite clearly that planning at the “right” time does both children and parents a great favour.

This ad ran in the Richmond News on April 29, 2016.