An enduring property power of attorney 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 power of attorney 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 power of attorney document is effective immediately upon its signing. An enduring power of attorney endures past the point that the grantor loses capacity to handle their own property and financial matters.
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Unless the agreement 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 will accept a power of attorney 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 financial institution may refuse to act on a power of attorney, including if, for example:
- The grantor has more than one power of attorney and the instructions are conflicting.
- The attorney instructs the financial institution to appoint or change the designated beneficiaries on the grantor’s registered investments such as tax free savings accounts or registered retirement savings plans.
- Certain transactions appear to be for the attorney’s own benefit.
Recently, however, it has come to my firm’s attention that financial institutions are also imposing their own internal form of “verification” requirement with respect to powers of attorney, even in circumstances where the agreement 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 financial institutions are:
- Sometimes requiring the attorney to sign and/or provide verification documents.
- Sometimes requiring the grantor to sign and/or provide verification documents.
- Sometimes requiring both the grantor and the attorney to sign and/or provide verification documents.
- Sometimes requiring no verification documents whatsoever.
Examples of verification requirements have included providing proof of incapacity (even in circumstances where the power of attorney 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.
Financial institutions’ 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 financial institution’s verification requirements, the grantor and the attorney may want to make an appointment with the relevant financial institution to discuss the additional documentation that it requires before it will acknowledge and respect the authority of the attorney (and any alternate attorney appointment) under the power of attorney.
It would be a good idea to bring a notarial copy of the original power of attorney to such a meeting.
Jessi Brockman is a lawyer with Stevenson Hood Thornton Beaubier LLP in Saskatoon. Brockman can be contacted at jbrockman@shtb-law.com. This article is provided for general informational purposes only and does not constitute legal or other professional advice.
