Family disputes involving Powers of Attorney are often emotionally charged. Questions about capacity, caregiving, finances, housing, and family relationships can quickly become intertwined.
One common misconception is that if a Power of Attorney is revoked, any related court proceeding becomes irrelevant.
The decision in Paletta v. Paletta et al., 2026 ONSC 4724 demonstrates that the issue is rarely that simple. When capacity itself is in dispute, a purported revocation may not end the litigation at all.
The Family Conflict
The case involved an 85-year-old mother and her adult children.
The dispute centered on a Continuing Power of Attorney for Property and a Power of Attorney for Personal Care that had been granted in favour of one son.
Over time, concerns developed regarding:
- The mother's capacity;
- Management of her finances;
- Her living arrangements;
- Family access; and
- Control of property and assets.
Later, documents purporting to revoke the Powers of Attorney were signed.
Some family members argued that the revocations ended the dispute. Others argued that the validity of the revocations depended on whether the mother actually had capacity when they were signed.
The court was therefore forced to address a fundamental question: can a person revoke a Power of Attorney if their capacity is already in doubt?
Capacity Questions Cannot Be Avoided
One of the most important lessons from the decision is that a capacity dispute does not disappear simply because a revocation document is produced.
The court noted an obvious problem.
If a person's capacity to make decisions is already being questioned, then their capacity to revoke a Power of Attorney may also be uncertain.
In other words, the revocation itself may depend on the answer to the very question the court is being asked to decide.
Because of this, the court concluded that the litigation could continue despite the existence of the revocation documents.
Capacity Is a Legal Question, Not Just a Medical One
The case also highlights a principle found in many capacity disputes.
Capacity is not determined solely by age, illness, or diagnosis.
Rather, the legal test focuses on whether the individual understands the nature and consequences of the decision being made.
People may:
- Have mobility limitations;
- Require assistance with daily activities;
- Experience memory loss; or
- Need support from family members
while still retaining legal capacity for certain decisions.
The court emphasized that these issues require careful analysis and cannot be resolved through assumptions alone.
The Importance of a Complete Evidentiary Record
A significant factor in the decision was the court's concern about the state of the evidence.
The court noted that:
- There had been no formal capacity assessment;
- Medical records were incomplete;
- Witness evidence had not yet been tested through cross-examination; and
- Competing family members offered different versions of events.
The court was unwilling to make final findings on capacity without a more complete evidentiary record.
This serves as an important reminder that courts prefer reliable, well-documented evidence when dealing with questions of capacity.
Family Members Frequently See Different Things
One difficult reality of capacity disputes is that family members often have very different perceptions of the same situation.
Some relatives may observe:
- Confusion;
- Forgetfulness;
- Difficulty managing finances; or
- Cognitive decline.
Others may observe:
- Independence;
- Clear communication;
- Sound judgment; or
- Consistent decision-making.
The court recognized that conflicting observations are common and often require further investigation.
Courts Take a Careful Approach to Capacity Assessments
The decision also considered whether a formal capacity assessment should be pursued.
The mother opposed being assessed.
While the court acknowledged that her wishes were important, it emphasized that those wishes are only one factor among many.
Courts must balance:
- Personal autonomy;
- Privacy interests;
- Available evidence;
- Vulnerability concerns; and
- The need for reliable findings.
A person's opposition to an assessment does not automatically end the inquiry.
Accounting Requests Require More Than Suspicion
The case also involved requests for an accounting concerning the management of the mother's property.
Family members raised concerns regarding various financial transactions and expenditures.
The court confirmed that not every concern automatically justifies a formal passing of accounts.
To obtain that type of relief, courts generally look for evidence of significant concerns regarding the management of finances.
General suspicion or family disagreement may not be sufficient.
This aspect of the decision reinforces the importance of maintaining proper records whenever a person acts under a Power of Attorney.
Corporate Property Is Not Personal Property
Another interesting issue involved property owned by a corporation.
Family members attempted to treat corporate assets as though they belonged personally to the mother.
The court rejected that approach.
The decision reminds families that a corporation is a separate legal entity.
Even where a parent owns or controls a corporation, corporate assets do not automatically become personal assets.
Questions involving corporate property must be addressed within the appropriate legal framework.
Practical Lessons for Families
Review Powers of Attorney Early
Planning while capacity is clearly intact can help avoid future disputes.
Document Decisions Carefully
Clear records often become critical evidence years later.
Obtain Independent Advice
Legal and medical professionals can provide valuable evidence regarding capacity and decision-making.
Maintain Financial Records
People acting under a Power of Attorney should be prepared to explain their decisions and transactions.
Do Not Assume a Revocation Ends the Matter
Where capacity is disputed, the validity of the revocation itself may become part of the litigation.
The Bottom Line
Paletta v. Paletta et al., 2026 ONSC 4724 demonstrates that capacity disputes are rarely resolved by a simple document. When concerns already exist about a person's decision-making ability, a purported revocation of a Power of Attorney may create additional questions rather than provide final answers.
The decision highlights the importance of thorough evidence, careful record-keeping, and independent professional involvement whenever significant decisions are made regarding Powers of Attorney and capacity.
How MerGen Law Can Help
At MerGen Law, we assist clients throughout Alberta with Powers of Attorney, Personal Directives, capacity disputes, adult guardianship and trusteeship matters, fiduciary duty claims, estate administration, and estate litigation. Whether you are challenging or defending a Power of Attorney, 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.