Is a Power of Attorney Enough?

An enduring property power of attorney (POA) is the written legal authorization in which a person known as the “Grantor” designates a person known as the “Attorney” to make decisions about the Grantor’s property and finances. Essentially a POA allows the Attorney to step into the shoes of the Grantor for the purpose of making decisions and transactions on the Grantor’s behalf. Unless the Grantor provides otherwise, the POA document is effective immediately upon the signing of the POA. An enduring POA endures past the point that the Grantor loses capacity to handle their own property and financial matters.  

Unless the POA restricts the powers of the Attorney,the Attorney has the power to, on the Grantor’s behalf and in the Grantor’s best interests, open and close bank accounts, deal with investments, collect debts, pay bills, buy goods and services, and maintain or sell a house or vehicle.

Generally, Financial Institutions (“FI”) will accept a POA that meets the applicable provincial/territorial requirements and gives the Attorney the power to conduct the desired financial transactions. However,there are circumstances when the FI may refuse to act on a POA, including if,for example:

• the Grantor has more than one POA and the instructions are conflicting;
• the Attorney instructs the FI to appoint or change the designated beneficiaries on the Grantor’s registered investments such as TFSAs or RRSPs; or
• certain transactions appear to be for the Attorney’s own benefit.

Recently, however, it has come to my firm’s attention that FIs are also imposing their own internal form of “verification” requirement with respect to POAs, even in circumstances where the POA complies with applicable provincial/territorial requirements, the Attorney has the requisite power to conduct the financial transaction, and there are otherwise no “red flags”. My office has received varying reports from clients that FI’s are (i) sometimes requiring the Attorney to sign and/or provide verification documents; (ii) sometimes requiring the Grantor to sign and/or provide verification documents; (iii) sometimes requiring both the Grantor and the Attorney to sign and/or provide verification documents; and (iv) sometimes requiring no verification documents whatsoever.  Examples of verification requirements have included providing proof of incapacity (even in circumstances where the POA is not contingent on the incapacity of the Grantor) and/or requiring the Grantor to be physically present to confirm the authority of the Attorney.

The FI’s varying requirements for such verification is understandably wreaking havoc on an Attorney’s ability to act as such, particularly in urgent circumstances where the Grantor may no longer have the capacity to verify the Attorney’s authority. To ward off potential future delays necessitated by a FI’s verification requirements, the Grantor and the Attorney may want to make an appointment with the relevant FI to discuss the additional documentation that the FI requires before the FI will acknowledge and respect the authority of the Attorney (and any alternate Attorney appointment) under the POA. It would be a good idea to bring a notarial copy of the original POA to such FI meeting.  

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Jessi Brockman is a lawyer with Stevenson Hood Thornton Beaubier LLP in Saskatoon.

Contact: jbrockman@shtb-law.com

This article is provided for general informational purposes only and does not constitute legal or other professional advice.

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