When you appoint someone as your attorney under an enduring power of attorney, you give them the power to take care of your financial and legal matters even if you subsequently become incapacitated. This might include paying your bills and expenses, depositing and withdrawing funds from your bank account, making or changing investments, and even handling the sale of your house if needed.
Some people appoint more than one person as their attorney. Appointing two or more attorneys has its benefits as well as challenges. The benefits include the ability for one to act when the other is absent or unavailable, and the opportunity for the attorneys to monitor each other’s conduct. The challenges are illustrated in a recent BC Supreme Court decision in Sommerville v. Sommerville, 2014 BCSC 1848.
Mr. Sommerville appointed his second wife and one of his daughters from his previous marriage as his attorneys under an enduring power of attorney. He gave them the power to act separately in all circumstances.
Mr. Sommerville and his second wife had married late in life. During the marriage, they had maintained most of their assets separately with a few joint assets. Since Mr. Sommerville had the higher income, the couple had agreed that Mr. Sommerville would deposit his pensions to a joint bank account for their personal and living expenses. The wife also deposited a small portion of her pensions to the same joint account. Throughout the marriage, the wife managed the family’s finances.
When Mr. Sommerville’s physical and mental capacity declined to the point of requiring long term care, the daughter, without consulting her stepmother, directed most of Mr. Sommerville’s pensions to be paid into a new bank account in her name as his attorney. The daughter was concerned that her father would need his pension income to pay his future care costs. This action caused a dispute to arise between the attorneys.
Under subsection 18(5) of the Power of Attorney Act, two or more attorneys with the same area of authority must act unanimously in exercising the authority unless the adult giving the power describes the circumstances in which the attorneys need not act unanimously, or sets out how a conflict between them is to be resolved. However, Mr. Sommerville had appointed his wife and his daughter with the same area of authority and permitted them to act separately with no conditions.
The BC Supreme Court considered the statutory duties of an attorney, which are specified in Section 19 of the Power of Attorney Act, and in particular, the duty that an attorney must act in the adult’s best interests, taking into consideration the adult’s current wishes, known wishes, beliefs and values when the attorney manages and makes decisions about the adult’s financial affairs.
The Court then examined the evidence of Mr. Sommerville’s wishes, beliefs and values as he had expressed or displayed them while he was mentally capable. The Court found that Mr. Sommerville would have wished for his attorneys to work together and consult each other before making decisions about his financial affairs, and that the daughter’s action deprived the wife of her ability to manage the family finances under a long-standing arrangement.
In the end, the Court directed that all of Mr. Sommerville’s pensions should be deposited into a bank account in the joint names of both attorneys. The wife would continue to manage Mr. Sommerville’s finances and would be responsible for running the joint bank account, and the daughter would be able to monitor the use of the account. In addition, the Court directed the wife to give priority to Mr. Sommerville’s monthly personal and health care expenses, but authorized her to use any excess pension funds not required for his care expenses for her own expenses.
The Sommerville case illustrates the challenges that can arise when appointing more than one attorney without specifying the scope of their respective authorities and how to deal with conflicts. Great care should be taken in choosing your attorneys and in setting out their roles.