Enduring Power of Attorney Misconduct

An Enduring Power of Attorney (EPA) is a legal document that allows someone to appoint another person — called an attorney — to manage their financial affairs. Unlike a regular power of attorney, an EPA continues to be effective (or “endures”) even after the person who granted it loses mental capacity. This makes EPAs essential for planning ahead, but it also creates opportunities for abuse when the donor can no longer supervise their attorney’s actions.

At Edmonton Law Office, we assist families dealing with suspected EPA abuse. Our litigation lawyers understand the urgency of these situations and provide the legal guidance necessary to protect vulnerable individuals and hold attorneys accountable.

Understanding Enduring Powers of Attorney Under Alberta Law

Under Alberta’s Powers of Attorney Act, once an attorney has accepted the appointment and the EPA is in effect, the attorney has a duty to exercise their powers to protect the donor’s interests during any period when the attorney knows, or reasonably ought to know, that the donor is unable to make reasonable judgments about matters relating to the donor’s estate. Attorneys also owe fiduciary duties, which generally means acting honestly and in good faith, avoiding conflicts of interest, and keeping records that allow the attorney to account for transactions if required.

It is important to understand that an EPA attorney is not a court-appointed trustee. An EPA is a private arrangement created by the donor while they still had capacity. There is no automatic court supervision of EPA attorneys. Court oversight typically occurs only if someone applies to the Court of King’s Bench for an order (for example, requiring the attorney to bring in and pass accounts, or terminating the EPA).

Common forms of EPA misconduct include:

• Self-dealing — using the donor’s money for personal expenses or purchases
• Misappropriation of funds — transferring the donor’s money to themselves or family members
• Poor or no record-keeping — failing to maintain proper financial records
• Failure to account — refusing to keep or produce records, or refusing to account when required (including under a court order)
• Misuse of funds — spending the donor’s money in ways that do not benefit the donor
• Manipulating the donor to change their will or beneficiary designations, or making unauthorized changes to beneficiaries or property ownership
• Isolating the donor from family members who might notice the abuse

Differences Between EPA Attorneys and Court-Appointed Trustees

Although EPA attorneys and court-appointed trustees both manage finances for people who lack capacity, they operate under different legal frameworks:

• EPA attorneys are appointed privately by the donor before losing capacity; court-appointed trustees are appointed by the court after incapacity
• EPA attorneys are governed by the Powers of Attorney Act; court-appointed trustees are governed by the Adult Guardianship and Trusteeship Act
• EPA attorneys have no automatic reporting requirements; court-appointed trustees may be required (including by court order) to submit accounts for court examination and approval
• Challenging an EPA attorney requires initiating court proceedings; court-appointed trustees are already under court supervision

The lack of built-in oversight for EPA attorneys means family members must often be more vigilant and proactive when they suspect abuse.

Warning Signs of EPA Abuse

EPA abuse often occurs when the donor is isolated or when family members are unaware of the attorney’s activities. Warning signs include:

• The donor’s bills are not being paid despite having adequate funds
• The donor’s living conditions have deteriorated
• The attorney refuses to discuss the donor’s finances with family members
• Unexplained withdrawals or transfers from the donor’s accounts
• The attorney’s lifestyle has improved while the donor’s has declined
• Property has been sold or transferred without clear benefit to the donor
• The attorney has isolated the donor from other family members
• Changes to the donor’s will or beneficiary designations

Because EPA attorneys are not supervised by the court, these warning signs may be the only indication that something is wrong.

Steps to Address Suspected EPA Abuse

1. Document your concerns — gather any evidence of the donor’s finances, living conditions, and the attorney’s behaviour
2. Request records and an accounting from the attorney — if the donor cannot request and concerns persist, an interested person can apply to court for an order requiring the attorney to bring in and pass accounts
3. Consult with a lawyer — understand your options and the evidence needed to take action
4. Apply to court — seek an accounting order, termination of the EPA, and/or appointment of an interim trustee or trustee (as appropriate)
5. Consider involving the police — if you suspect theft or fraud

Acting quickly is important because the attorney may continue to deplete assets while you investigate.

Legal Remedies for EPA Abuse

Courts have several remedies available to address EPA abuse, depending on the facts and urgency:

• Court order terminating the EPA (in the donor’s best interests) and removing the attorney’s authority
• Court order directing the attorney to bring in and pass accounts (a formal accounting)
• Repayment or restitution of misappropriated funds, and return of property
• Appointment of an interim trustee, or a trustee under the Adult Guardianship and Trusteeship Act, to take over management of the Adult’s affairs
• Interim preservation orders (for example, freezing accounts) to prevent further dissipation
• Personal liability for losses caused by breach of fiduciary duty, and potential cost consequences

In cases involving theft or fraud, the matter may also be referred to law enforcement for criminal investigation.

When the Donor Still Has Capacity

If the donor still has the mental capacity to understand the nature and effect of revoking the EPA, they can revoke the EPA and appoint a new attorney. A lawyer can assist with this process and help ensure the revocation is properly communicated to financial institutions and other parties.

If the donor lacks the capacity to revoke the EPA, family members or other interested parties may need to apply to the Court of King’s Bench to have the EPA terminated and, if necessary, to have an interim trustee or trustee appointed under the Adult Guardianship and Trusteeship Act.

Contact us today for an initial consultation

If you suspect someone is abusing their authority under an Enduring Power of Attorney, contact Edmonton Law Office at 780.784.6666 for a free initial consultation. Our litigation lawyers can assess your situation, explain your legal options, and help you take appropriate action to protect your loved one.