Wills, Estates & Trusts

Parties Dispute Suitability for Power of Attorney

January 25, 2024

photo of hospital bed representing the question of an elderly person's capacity to execute a new power of attorney

When family members, friends, or loved ones enter the latter years of life, they may require assistance with day-to-day tasks, legal concerns, or financial matters. As part of one’s estate planning documents, an enduring power of attorney may be utilized in cases when someone becomes unable to handle such matters on their own. A power of attorney allows an individual to appoint a specific person who will be responsible for making decisions regarding financial and legal decisions on someone else’s behalf. Even if someone is capable of making such decisions, they could still choose to grant an immediate power of attorney, which allows someone else to make financial decisions on their behalf .

Issues can sometimes arise when multiple parties believe they are best suited to act as power of attorney for someone else, and when the disputing parties are unable to resolve the issue themselves, they may end up involved in litigation.

Parties At Odds Over Power Of Attorney Appointment

The case of Godsman v Godsman revolved around the applicants’ 92 year old mother, (“MG”). MG’s two adult sons (“TG” and “LG”) were competing with the respondent, (“JG”), who was married to MG’s husband’s nephew, over who would be best suited to act as power of attorney for MG.

MG and her husband had emigrated to Canada from the United Kingdom in 1988 while LG and TG remained in the UK. MG and her late husband moved to the Calgary area when they came to Canada. JG and MG became close when both of their husbands had passed away and JG began to help MG with various matters, including financial issues, until their relationship eventually broke down.

Applicants’ Mother Prepares Power Of Attorney After Series Of Falls

In 2020, MG took a series of falls and JG decided to take her to see a lawyer. Upon receiving instructions from MG, the lawyer prepared the “2020 documents,” which included appointing JG as her power of attorney. The appointment of JG was both “logical and practical, given the closeness of their relationship, the help Jeanette had provided Ms. Godsman in the past, and the fact she was “on the ground” in Calgary while Ms. Godsman’s sons were in the U.K.”

In February 2021, JG fell again and sustained a fracture to her lower spine. Accordingly, she was hospitalized, however she returned home shortly thereafter. Medical professionals indicated they were worried about MG’s capacity due to her inability or refusal to acknowledge the seriousness of her condition. Two physicians determined that MG lacked capacity with respect to decisions about health care and accommodations, but did not declare her incapable for legal, financial, or any other matters.

Respondent Argues Individual Lacked Capacity To Execute New Power Of Attorney

JG subsequently began to explore alternative living arrangement options for MG at a facility where she could receive the full-time care and support the medical team had recommended. MG moved into a facility, however, she soon began to express dissatisfaction to her children and JG. This led to the deterioration of her relationship with JG.

In June 2021, LG contacted a lawyer on his mother’s behalf who met with MG and drafted a new enduring power of attorney (the “2021 documents”), this time naming LG and TG as attorneys. However, JG argued that MG lacked the requisite capacity to change and execute a new power of attorney and insisted that she remain as power of attorney pursuant to the 2020 documents.

Requisite Capacity For Power Of Attorney Execution

The matter came before the Court on application by TG and LG. The Court noted that the formal requirements for an enduring power of attorney are found in section 2(1) of the Powers of Attorney Act and indicated that these provisions give rise to a presumption of capacity. As such, JG was responsible for rebutting the presumption and must show that MG did not understand the “nature and effect” of the 2021 documents she signed.

The 2014 decision of Midtdal v. Pohl established that such an understanding could be met if the donor (in this case, MG) understood that:

(a)   the attorney would be able to assume complete authority over the donor’s affairs;

(b)   the attorney could do anything with the donor’s property that the donor could have done;

(c)   that the authority would continue if the donor became mentally incapable; and

(d)   would in that event become irrevocable without confirmation by the court.

Court Finds MG Entitled To Sever Respondent From Power Of Attorney Appointment

JG raised a number of concerns related to MG’s capacity at various times, including the declaration made by the two physicians at the time of her hospitalization. However, none of the provided evidence related to her ability to understand the 2021 documents she asked to have prepared. The matters raised by JG also did not occur at the time the documents were executed by MG. The legal team who met with and prepared the 2021 documents also testified that MG appeared to understand what she was doing and why she was doing it, which was to remove JG as her power of attorney.

The Court found that MG clearly possessed the four facets of knowledge as required by the test outlined in Midtdal, and was aware of her circumstances and affairs. Accordingly, the Court found in favour of MG’s children. Although the Court acknowledged that JG could be the preferable attorney for MG given that she cares for MG’s wellbeing and, unlike MG’s sons, resides in the same city as MG. However, this argument was not at issue, as the Court held that MG was able to choose to sever JG from her power of attorney appointment and instead appoint her children.

Contact DBB Law for Practical and Comprehensive Estate Planning Advice

At DBB Law in Calgary, our compassionate wills and estates lawyers work closely with each client to understand their estate planning needs and help them develop a sound estate planning strategy. Our firm’s multi-disciplinary approach and broad range of experience ensures that your legacy and succession are secured for the future. If a dispute arises regarding capacity, a will challenge, or estate administration, our lawyers take quick action to preserve your interests and resolve conflict efficiently. To schedule a confidential consultation with a member of our team, please contact us online or call us at 403-265-7777.

Blogs/Firm News

Civil Litigation

April 25, 2024

Court Orders Used Car Seller to Refund Buyer Due to Misrepresentation

Civil Litigation

April 8, 2024

Customers Unable to Recover Missing Deposit Funds Sent by E-Transfer

Employment & Labour Law

March 28, 2024

Human Rights Tribunal Addresses Objections to Proposed Witnesses in Discrimination Case