Financial Abuse and Power of Attorney in Manitoba

How Power of Attorney Abuse Happens

An Enduring Power of Attorney gives the attorney broad authority over the donor's financial life — bank accounts, investments, real estate, tax filings. This authority is necessary for the attorney to function, but it also creates the conditions for financial exploitation.

The most common forms of abuse in Manitoba:

Commingling funds. The attorney mixes the donor's money with their own, making it impossible to track what belongs to whom. Manitoba law explicitly requires the attorney to keep the donor's assets separate, but enforcement depends on someone noticing.

Unauthorized gifts or transfers. The attorney transfers the donor's money to themselves, their spouse, or their children — justified as "what Mom would have wanted" or "an advance on the inheritance." Gifts or transfers to people close to the attorney should not be assumed to be authorized simply because the EPOA grants broad financial powers; document the authority and get legal advice before making them.

Neglecting property. The attorney fails to pay property taxes, maintain insurance, or make necessary repairs — letting the donor's assets deteriorate while diverting funds elsewhere.

Excessive personal compensation. The attorney takes payments that are not clearly authorized or documented — particularly when no one is monitoring the accounts.

Selling assets below market value. The attorney sells the donor's property or investments at a loss, often to themselves or to associates, at prices that don't reflect fair market value.

Warning Signs for Family Members

Financial abuse often goes undetected for months or years because the donor is incapacitated and can't monitor their own accounts. Other family members should watch for:

• Unexplained withdrawals or transfers from the donor's accounts
• The attorney becoming evasive about the donor's finances or refusing to provide the required annual accounting
• The donor's bills going unpaid despite having sufficient assets
• Changes in the donor's standard of care that don't match their financial situation (e.g., a wealthy parent moved to the most basic care home while the attorney buys a new car)
• Property being sold or mortgaged without a clear reason related to the donor's care
• The attorney isolating the donor from other family members who might ask questions

Safeguards Built into Manitoba Law

The Powers of Attorney Act includes several protective mechanisms, though they only work if someone is actively monitoring:

Annual accounting obligation. The attorney must provide a written accounting of all financial transactions to the person named in the EPOA. If no one is named, the accounting goes to the nearest competent adult relative, or to the Public Guardian and Trustee if no relative qualifies. The attorney and their spouse are disqualified from being the "nearest relative" for this purpose — preventing the fox from guarding the henhouse.

Section 11 witnessing. Manitoba's strict witness requirements (lawyers, physicians, police officers, judges, notary publics, and marriage solemnizers) exist partly to prevent coerced signings. A qualified professional witness should evaluate whether the donor understands the document and is signing voluntarily.

Witness exclusions. The attorney and their spouse cannot witness the EPOA. This prevents the most direct form of coercion — an attorney standing over the donor during execution.

Safeguards You Can Build into the Document

Beyond the statutory minimums, the EPOA itself can include provisions that limit the attorney's power and increase oversight:

Name a specific accounting recipient. Don't leave it to the default rules. Name a trusted family member, accountant, or the family lawyer as the person who receives annual accountings. Choose someone independent of the attorney.

Require dual authorization for large transactions. The EPOA can require that transactions above a certain dollar amount (e.g., $5,000) require the written approval of a second named person.

Restrict specific powers. The EPOA can exclude the attorney from making gifts, lending the donor's money, or changing beneficiary designations on insurance policies or registered accounts.

Appoint multiple attorneys jointly. Joint appointment means no single attorney can act unilaterally — both must agree on every transaction. This creates accountability, though it also creates the risk of deadlock if the attorneys disagree.

What to Do If You Suspect Abuse

Step 1: Request the annual accounting. If you're the named accounting recipient (or the nearest relative), you have a legal right to this information. The attorney's refusal or inability to provide it is itself a red flag.

Step 2: Contact the Public Guardian and Trustee. The PGT may become involved as a committee or administrator of last resort, particularly when no willing, capable, or suitable friend or relative can act. In a contested case, an interested party may need to apply to the Court of King's Bench for directions or removal of an attorney.

Step 3: Apply to the Court of King's Bench. Any interested party can file a Notice of Application ($250 filing fee) asking the court to:

• Order a passing of accounts (a formal judicial review of the attorney's financial management, $150 filing fee)
• Remove the attorney and appoint a replacement
• Order restitution for misappropriated funds

Step 4: Contact law enforcement. If the evidence suggests deliberate theft or fraud, file a report with the Winnipeg Police Service or local RCMP detachment.

Prevention Is Easier Than Recovery

Stolen or mismanaged assets are difficult to recover — the money may already be spent, the attorney may not have personal assets to satisfy a judgment, and litigation costs can exceed the amounts in dispute.

The most effective protection is structural: choose the right attorney, build oversight mechanisms into the EPOA, and ensure that at least one independent person is monitoring the annual accountings.

The Manitoba Power of Attorney Kit includes an attorney duties guide and accountability framework that helps families set up these safeguards from the start — before the donor loses the capacity to change their arrangements.

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