Winnipeg Free Press - PRINT EDITION

Avoiding problems while helping loved ones with financial affairs

  • Print

Barbara Smith appointed her daughter, Debbie, to handle her financial affairs if she ever became unable to do so herself. That was done by a power of attorney document she had her lawyer prepare. That showed foresight. In April of 2010, Barbara became mentally incompetent.

Her daughter took over Barbara's finances. A person handling financial affairs for another under a power of attorney is called an "attorney." In legal language, Debbie was serving as the attorney for her mother.

Things came apart quickly. It looks like Debbie might have tried her best on behalf of her mother, but she ended up making mistakes. By the time everything was done, Debbie spent two years battling with her family in court. She lost the case and was discharged as her mother's attorney. She also had to pay damages.

Here is what happened. First, Debbie kept poor records. An attorney is expected to keep detailed daily records of all financial transactions that take place. She did not. She was not an accountant by training, and figured it was all in the family and it was permissible to keep informal records. That is not the way it works. An attorney is forced to produce detailed records on demand. If they have not been kept, the attorney can be forced to work backwards and reconstruct them.

Second, when her brother wanted to know what was going on, she told him to mind his own business. That is actually a delicate predicament. Debbie was obliged to keep her mother's affairs confidential. Manitoba legislation requires she share financial information with her mother's nearest kin. That requirement holds unless the power of attorney document overrides it. Here, it did not. If the document overrode his right to information, she would have been wise to find a way to accommodate his need to know all was well with Mom. She could have applied to court and "passed accounts." That would have allowed her to release information under the supervision and sanction of the court.

Third, Debbie received some bad advice from a lawyer and violated one of the fundamental rules that apply to a person when they are handling money for another person. The lawyer told her that she could take the sum of $250,000 as a "pre-inheritance" and take a reduced share of her mother's estate to even things up later on, after her mother had passed away.

In fairness to the lawyer, there were some complicating circumstances and the advice might have been based on a misunderstanding of the facts. The rule is this: An attorney has to act in the exclusive best interest of his or her incapacitated ward. The courts treat that as sacred. When the brother dragged Debbie in front of a judge, the judge was highly displeased and ordered her to pay it back with interest.

The mother was too far gone to appreciate the fight that was occurring over her affairs, but would have been mortified.

Are you serving as someone's attorney? If so, you will want to be very careful. Everyone wants to do a good job. You owe it to yourself to learn the rules.

You owe it to the person you are helping to abide by those rules.

This is a true story. The details are based on the written judgment published by the court that decided the case. Names, dates and facts have been changed to protect the privacy of the family involved.

Want to learn more about handling financial affairs for a loved one? An upcoming seminar is scheduled here in Winnipeg to provide four hours of education on point.

It is being held at The Manitoba Club, 194 Broadway Ave., on Saturday, June 1, from 8:00 am to noon. To register, contact The Knowledge Bureau at 1-866-953-4769 (toll free both inside and outside Winnipeg), or go online at knowleldgebureau.com/attorneyschool.

John E. S. Poyser is a lawyer with Tradition Law LLP. Contact him at 204-947-6802 or jpoyser@traditionlaw.ca, or visit www.traditionlaw.ca.

Republished from the Winnipeg Free Press print edition May 29, 2013 B7

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Lindor Reynolds speaks candidly about life with terminal cancer

View more like this

Photo Store Gallery

  • A golfer looks for his ball in a water trap at John Blumberg Golf Course Friday afternoon as geese and goslings run for safety- See Joe Bryksa’s 30 day goose challenge- Day 24– June 15, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • Horses enjoy a beautiful September morning east of Neepawa, Manitoba  - Standup Photo– Sept 04, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos

Poll

Do you support Pimicikamak First Nation's protest against Manitoba Hydro?

View Results

View Related Story

Ads by Google