Financial institutions and advisors are often asked whether it is proper for an attorney for property to make substantial gifts of property to himself or herself. There are strict limits on when and how much an attorney may gift to anyone. Ontario's Court of Appeal, in R. v. Hooyer recently imposed a criminal conviction on an attorney for property who was acting for an elderly man with dementia and who argued that he believed he had the right to use theman's assets for himself. Over seven years, the attorney moved into the man's home, dissipated all of his assets and spent most of his income on himself, leaving the old man penniless and in debt. The attorney was convicted of theft and imprisoned for two years less one day. The Court said the attorney was guilty of theft in part because he "knew that the assets belonged to [the man] when he converted them to his own use." The man had died before the case was argued, and the attorney was a residuary beneficiary under his Will. Even so, the court required the attorney to make restitution to the man's estate. This distressing tale gives rise to some important lessons:
1. An attorney for property does not legally own the assets of the person who made the power of attorney (the "Grantor.")
2. An attorney for property is a fiduciary, which means that he is obligated to safeguard the Grantor's interests. The Courts take this obligation very seriously.
3. The fact that an Attorney may ultimately benefit under the Grantor's Will does not mean that he is entitled to take the Grantor's assets while the Grantor is alive.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
