Second Power of Attorney
Houston v Houston 2011 BCSC 510 is an example of an estate dispute between the husband’s children from his 1st marriage, and his surviving wife and her children, relating to the use of a power of attorney by the children of the deceased.
The husband and a wife held title to their condominium as joint tenants.
The deceased firstly gave a power of attorney dated July 22, 2005 to one of the children, who subsequently used it on April 14, 2009, to register a transfer from himself, as attorney for his father, to his father, for the sole purpose of severing the joint tenancy between his father and his 2nd wife.
The legal effect of such a severance is that instead of automatically going to the survivor upon the death of the 1st joint tenant, the property instead will go to the deceased’s estate and be distributed accordingly.
The plaintiffs argued that a subsequent power of attorney granted to his plaintiff wife in 2008, revoked the 1st power of attorney, so that it was invalidly used to sever the joint tenancy.
The plaintiff wife sought a court order that title to the condominium be restored into joint tenancy, so that she would inherit the other half of the condominium automatically.
The severance of the joint tenancy instead caused the deceased’s one half interest in the condominium to instead go to his estate.
The court found that the 2005 Power of Attorney had not in fact been revoked by the 2008 Power of Attorney.
There had been no specific signed Revocation of the Power of Attroney.
The court further found that it was not a breach of fiduciary duty by the defendant in using the power of attorney to severe the joint tenancy, as that use had been consonant with the husband’s express wishes before he died.
Of note, the plaintiff was unable to produce any legal authority to support the argument that the 1st power of attorney was revoked by the second power of attorney.
The judge did however qoute from a journal called Estate, Trust and Pensions Journal, volume 18, paragraph 244 – 245 which said in part:
“The better view is likely that the granting of a power of attorney may revoke by implication a previously given power of attorney in circumstances where the granting of the new power of attorney can be considered an act inconsistent with the operation of the 1st power of attorney”
The court also quoted what should be considered to be trite law , namely` it is the attorney“s duty to use the power only for the benefit of the donor and not for the attorneys own profit, benefit or advantage. The attorney can only use the power for his own were her own benefit when it is done with the full knowledge and consent of the donor.
Disinherited.com is of the opinion that this case could have gone either way, given that it was open to the judge to find that the second power of attorney given to the wife, instead of the children, was an act inconsistent with the operation of the first power of attorney, especially given that the first power of attorney used it to indirectly benefit themselves, to the determine of the second attorney.