Son fought to regain POA over his parents' accounts

Mr. A's parents had signed a Power of Attorney (POA), prepared by their lawyer, giving their son wide-ranging control over their financial affairs. For almost a decade, Mr. A managed his parents' finances without incident.

The parents then signed their bank's own standard POA, which Mr. A thought was a mere housekeeping measure that would supplement the existing POA.

Mr. A soon realized the latest POA was far more restrictive. His attempt to open a brokerage account under his parents' name was turned down and the bank denied access to his father's debit cards. The bank would also no longer honour cheques from the parents' account signed by Mr. A.

Frustrated, Mr. A complained that the latest POA should be dissolved as it was too limiting and because both he and his parents did not understand what they were signing. He insisted the bank recognize the original POA above all other documents.

The bank maintained the implications of signing the second POA were properly disclosed to all parties. It was unwilling to let Mr. A manage his parents' finances outside the confines of the new POA provisions. Mr. A then brought his complaint to OBSI.

Complaint not upheld

Our investigation confirmed the latest POA was prepared by the bank at the request of Mr. A's parents. The bank's POA clearly stated that, while it does not necessarily supersede any other POAs, where there are conflicting clauses the bank's POA would prevail. All indications were that his parents understood what they were doing when they signed the new POA, and we noted that Mr. A also had the opportunity to review and ask questions about the document before signing, which he chose not to do.

It is common for banks to request customers sign a standard bank POA, to ensure consistency in their treatment of customers. However, many people do not fully appreciate the consequence this may have on existing POAs. This can lead to problems even when the bank has done nothing wrong and the terms of the POA have been properly disclosed.

Any legal document should be fully understood by the parties involved. When in doubt, it is wise to seek your own legal counsel. We found no evidence to suggest Mr. A or his parents were misled by the bank, and as such OBSI did not recommend that the bank take any action.

(2011)