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Tuesday, June 29, 2010

Jail term for theft by person holding power of attorney


Not long ago I mentioned in this blog that a person who was acting under an Enduring Power of Attorney could go to jail for theft of the property of the person he or she was supposedly representing. That post has led to several questions about how harshly the law might deal with a thieving Attorney under a Power of Attorney.

First of all, the crime of "Theft by a person holding power of attorney" is a specific crime under section 331 of the Canada Criminal Code. It is considered a specialized form of theft, which is a crime against property. The attorney can be found to have committed this crime if he or she sells, mortgages, pledges or in any other way disposes of some or all of the person's real or personal property. It is also theft if the attorney sold or mortgaged the property legitimately but then kept the proceeds, or did anything at all with the proceeds that he or she was not authorized to do by the Power of Attorney document. So you can see that it's a pretty broad definition.

The thieving Attorney can do jail time, as the punishment is the same as any other kind of theft. If the value of the property stolen is under $5,000, the jail term can be up to two years. If the property is worth more than $5,000, or if the property stolen is a testamentary instrument (e.g. a Will or Codicil), the jail time can be up to 10 years.

The reason many dishonest attorneys get away with abusing their position under the Enduring Power of Attorney is that nobody notices what's going on. And if anyone does notice, they tend not to say anything because they are too polite or feel they don't know enough about it, or they simply don't want to look greedy or nosy.

5 comments:

  1. Dear Lynne, thank you for the informative article.

    Is it possible to report a suspected theft by power of attorney after the grantor has deceased? It appears that the value of the estate has been lessened by this suspected theft.

    Also, how does one report a suspected theft by power of attorney?

    thank you in advance

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  2. I was joint with right of survivorship on all my mom's bank accounts and GICs, and within days of her being told she had terminal cancer my brother told my mom's lawyer he was worried I might "remove large sums of money" and the lawyer had no objections to him removing all the funds prior to my mom's death, despite the fact that he knew my brother was to only get a few thousand in the Will and the bulk of the estate was meant for me. All my mom's banks released the funds, without consulting me, even though I was joint at the time.

    The Police told me it would take a year or two and not to expect to get any money back, but told my mom that they considered it a 'family matter' and that she should take care of it herself.

    My mom's lawyer said since she had no money, that she should leave the matter with the Police.

    The result: Almost 3 years later my mother is still alive, and now has to spend her pension money to pay a another lawyer, trying to get some money back.

    I also found out, that although the bank said my mother's money was 'insured' it was not insured against theft.

    ReplyDelete
  3. Right on. Person w power of attorney can steal to without worry. If they stole the money the law does nothing and the thief has the money to hire lawyers and they do not

    ReplyDelete
  4. My daughters were left 1/8 of my mother's estate. It states that it is to be put into trust until they turn 18. A public trustee will be involved because no one else was named. My sister and I are both executors for the will. My my questions are, is it up to me to invest the money for my children? Can any money be used before the age of 18 for their general welfare; housing, food, etc?

    ReplyDelete
    Replies
    1. Hi Jenn,
      I'm not sure what you mean by "a public trustee will be involved because no one else was named". You and your sisters were named as executors, which by default makes you two the trustees of the trusts for the children. Yes, it is up to both of you to invest the money for the children, unless the Public Trustee is going to do it.

      In some provinces, the Office of the Public Trustee is notified when minor beneficiaries inherit from an estate. Their role is to ensure that the children receive the inheritance they are supposed to receive, and that the children's interests are looked after. Whether or not they physically receive the inheritance and look after the investments for the children will depend on the wording of the will.

      Whether or not you can use some of the money for the general maintenance of the children again depends on the wording of the trust, and on the quality of the will (home-made wills are hopeless for trusts). Sometimes trusts are set up for the purpose of looking after kids while they are minors, but others are set up so that no money is available while they are minors. Still others are written so that funds can only be used for specific purposes such as education or health. I assume from the fact that you've asked me this question that so far you're not working with a lawyer. I think you should have a lawyer clarify exactly what you are allowed to do with the money in the trust. Take the will to an experienced lawyer and have a discussion about your rights and your responsibilities. It's worth it to spend a couple of hundred dollars at the beginning to avoid later having to spend tens of thousands if you should be sued for mis-managing the trust.

      Hope it goes well, and I'm very glad you're asking questions before going ahead.

      Lynne

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