Power of Attorney Litigation
A person who is 18 years of age or older and has the requisite mental capacity can grant a power of attorney for property to another person, people, or trust company to manage their property (meaning real estate and other financial assets such as bank accounts and investments). This document usually takes effect immediately upon it being signed. In some cases, the effectiveness of the document will be delayed until the occurrence of a specific event, such as the incapacity of the grantor or the grantor having given written instructions to the attorney to commence acting. A person who is 16 years of age or older and has the requisite mental capacity can grant a power of attorney for personal care to another person or people to make their personal care decisions (meaning decisions regarding health care, shelter, safety, nutrition, clothing, hygiene). This document only takes effect upon the incapacity of the grantor to make personal care decisions. The person who makes a power of attorney is called the “grantor”. The person who is appointed to make decisions under a power of attorney is called the “attorney”.
A variety of disputes can arise in the context of powers of attorney. Here are some examples:
- A person has granted powers of attorney to two or more people to act jointly and those individuals have a dispute with each other as to how the decisions should be made;
- The attorney acting under a power of attorney has not complied with his or her duties as set out in law, has breached his or her fiduciary duties to the grantor, or has been negligent in the performance of his or her role as attorney.
- The attorney fraudulently procured the power of attorney document (i.e., the grantor did not intend or have the capacity to grant a power of attorney to the person who is purporting to act as attorney).
- There can be a dispute as to whether the grantor had the requisite mental capacity to grant the power of attorney or whether the power of attorney was properly executed.
- Sometimes a person will make a power of attorney appointing a person and then later revoke that power of attorney and make a new one appointing a different person. In some cases, the grantor might do this several times, changing his or her power of attorney back and forth between the same people or appointing new people each time. Disputes often arise in these cases, where the attorneys named under one of the powers of attorney have concerns or complaints regarding the attorneys named under the current power of attorney.
- The attorney has co-mingled the grantor’s assets with the attorney’s own assets, or has otherwise mismanaged the grantor’s assets and cannot account for the full value of the grantor’s assets.
There can be a dispute as to whether the power of attorney has taken effect and whether the attorney should have commenced acting when he or she did.