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How much is ‘too much’?

By Wills & Estates Team (posts)

Excessive Spending under a Power of Attorney

If you have been granted Power of Attorney, it is important for you to understand the duties and obligations that come with your role. In a Power of Attorney document, an adult (sometimes called the “donor”) grants another person (known as the “attorney”) the authority to manage the donor’s legal and financial affairs. This means the attorney can make decisions about how and when to spend the donor’s money. These decisions must be guided by the various duties that the attorney owes to the donor.

An attorney owes fiduciary duties to the donor. These obligations come with the ability of the attorney to deal with the donor’s legal and financial affairs. Fiduciary law requires an attorney to act in good faith and in the best interests of the donor, and to exercise a degree of diligence and care.

What about in BC Law?

The law in B.C. states that an attorney must, to a reasonable extent, give priority to meeting the personal and health care needs of the donor [see Power of Attorney Act, RSBC 1996, c 370, s. 19(3)(a)].

Our BC Courts have recently considered the question of “how much is too much?” when it comes to spending by the attorney.  In Putman v. Putman, 2021 BCSC 1700, a brother and sister, David and Linda, were jointly appointed as attorneys over their mother. David and Linda could not agree on the appropriate long-term care arrangements for their mother, who had Alzheimer’s and other medical conditions.

Linda had placed their mother in a care home that they had toured and selected before her mother’s illness. Linda also arranged for additional care and support from a companion service. David disagreed with Linda’s decisions, arguing that she was not acting in their mother’s best interests and accusing her of “excessive spending”.

The Court found that Linda had not breached her duties and that the expenses incurred for her mother’s care were appropriate in the circumstances. An attorney must prioritize the donor’s personal care and health care needs to a reasonable extent. Linda and David’s mother was a wealthy woman who had the financial means to pay for the level of care she received. There was also evidence that the additional care and support improved the mother’s quality of life.

Questions to Consider

Using the Putman case as a guide, when contemplating whether costs associated with health care are appropriate, it may be helpful to ask the following questions:

  1. Does the type of health care serve the best interests of the adult?
  2. Does the type of health care increase or decrease the adult’s well-being and quality of life?
  3. Does the adult have the financial means to afford the type of health care?
  4. Are there medical support for or opinions agreeing or disagreeing with the type of health care?
If you have questions about planning for incapacity, or about fulfilling your obligations under a Power of Attorney, contact our Wills & Estate Team – we’re here to help.
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