When a parent changes a Power of Attorney and appoints one child instead of another, family conflict often follows.
Disappointed family members may assume that the change must have been the result of undue influence, especially when the parent is elderly or experiencing cognitive decline.
However, courts are careful not to confuse family disagreement with legal wrongdoing.
The Manitoba Court of Appeal's decision in Drewniak v. Smith provides important guidance on capacity, undue influence, and the validity of enduring Powers of Attorney.
A Parent Has the Right to Change Their Power of Attorney
A Power of Attorney is a planning tool that allows a person to appoint someone to manage financial affairs on their behalf.
Like a will, a Power of Attorney can often be changed if the person making the document has the necessary capacity.
Family members sometimes believe that because they were named in an earlier document, they are somehow entitled to remain in that role.
That is not the case.
Provided the person has capacity, they remain free to:
- Revoke an existing Power of Attorney;
- Appoint a different attorney;
- Change alternate attorneys; or
- Alter their estate planning arrangements.
The court's role is not to decide whether the decision was fair, but whether it was legally valid.
Capacity Is Specific to the Document
One of the key issues in many Power of Attorney disputes is capacity.
Importantly, capacity is not an all-or-nothing concept.
The level of understanding required to create a Power of Attorney is generally different from the capacity required to make a will.
A person granting a Power of Attorney must generally understand:
- The nature of the document;
- The authority being granted;
- That the attorney will be able to manage financial affairs;
- That the attorney can make decisions on the donor's behalf; and
- That the authority may continue if the donor later loses capacity.
The relevant question is whether the individual understood the nature and effect of the document when it was signed.
The existence of memory issues, cognitive decline, or even certain medical diagnoses does not automatically mean a person lacks capacity.
Cognitive Decline Does Not Automatically Invalidate a Power of Attorney
Many older adults experience some degree of cognitive impairment.
The law recognizes that capacity exists on a spectrum.
A person may have:
- Difficulty remembering names;
- Problems with short-term memory;
- Age-related cognitive decline; or
- Certain medical conditions,
while still retaining the ability to understand a particular legal decision.
Courts therefore focus on the person's understanding at the time the document was executed rather than relying solely on medical labels or diagnoses.
What Is Undue Influence?
Undue influence occurs when another person's pressure, domination, or manipulation effectively overcomes an individual's free will.
The focus is not on persuasion alone.
Family members frequently:
- Offer advice;
- Provide information;
- Attend appointments;
- Transport loved ones to meetings; and
- Assist with estate planning discussions.
Those activities do not automatically amount to undue influence.
The legal concern arises when a person is no longer making an independent decision because their will has been overborne by another.
Family Relationships Are Not Automatically Suspicious
One of the most important takeaways from the decision is that appointing a family member as attorney is not inherently suspicious.
In fact, most Powers of Attorney name:
- Children;
- Spouses;
- Siblings; or
- Other trusted relatives.
Courts recognize that these individuals are often the most logical choices.
Simply appointing one child instead of another does not create a presumption of wrongdoing.
If it did, nearly every estate planning document would be vulnerable to challenge.
Not Every Relationship Creates a Presumption of Undue Influence
The Court clarified that a relationship capable of influence does not automatically prove undue influence.
Even where a close family relationship exists, additional evidence is often required.
Courts may consider factors such as:
- Dependency;
- Isolation;
- Vulnerability;
- Independent legal advice;
- The donor's reasons for the decision; and
- Whether the decision appears rational in the circumstances.
The fact that one person was trusted does not automatically mean they improperly exercised that trust.
Independent Advice Can Be Important
A recurring theme in estate litigation is the value of independent professional advice.
Lawyers, financial advisors, physicians, and other professionals can provide important evidence regarding:
- Capacity;
- Understanding;
- Voluntariness; and
- The donor's intentions.
When a change to a Power of Attorney occurs after discussions with independent professionals, courts are often more comfortable that the decision reflects the donor's wishes.
Proper documentation can be invaluable if the document is later challenged.
Practical Lessons for Families
Review Powers of Attorney Regularly
Documents should be reviewed to ensure they continue to reflect current wishes and relationships.
Document Reasons for Major Changes
Where significant changes are made, a clear explanation can help reduce future disputes.
Obtain Independent Legal Advice
Independent advice can provide valuable protection for both the donor and the attorney.
Do Not Assume Family Disagreement Equals Undue Influence
A parent's decision may be unpopular while still being legally valid.
Address Concerns Early
Questions regarding capacity or undue influence are often easier to address while the donor can still participate in the discussion.
The Bottom Line
Drewniak v. Smith reinforces an important principle: a parent is entitled to appoint the person they trust to manage their affairs, even if other family members disagree with that choice. A change in a Power of Attorney, standing alone, is not evidence of undue influence.
Courts will focus on whether the donor had the required capacity, understood the nature of the document, and made the decision freely. Where those elements are present, the donor's autonomy and wishes will generally be respected.
How MerGen Law Can Help
At MerGen Law, we assist clients throughout Alberta with Powers of Attorney, capacity disputes, undue influence claims, estate planning, guardianship and trusteeship matters, and estate litigation. Whether you are challenging the validity of a Power of Attorney or seeking to ensure your own planning documents will withstand scrutiny, we are here to help.
This article is intended for informational purposes only and does not constitute legal advice. Individuals facing concerns about elder abuse should seek professional advice tailored to their specific circumstances.