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Email this11:00 pm
October 21, 2013
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I have recently learned that a friend is managing his mother's money, but not necessarily to best effect.
He has POA, and his mother signed all the necessary papers to put this into effect at Meridian CU some years ago. For some complicated legal reasons, it is now very difficult for him to consider moving any of her money elsewhere.
The problem is that the money is in the high six figures and thus not fully insured. Also, it's all in a savings account. I think the insurance is the bigger issue as he doesn't seem concerned about return so much.
Does anyone know any way of making this work within Meridian? The only thing I could think of was perhaps their affiliated discount brokerage, whatever it is, where he could probably buy assortment of insured GICs and/or ISAs,but I don't know if the POA would be accepted at the brokerage without the mother's active consent - and she is unable to do this due to health. He has the ability to move her money aroun in Meridian as he sees fit.
No RIF. Too old for RSP. TFSA is full. No existing brokerage accounts. My friend will be the sole heir.
What do you think his options are at Meridian?
12:33 am
September 29, 2017
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Sounds like the POA is only bank specific and not a broad/generic POA.
Meridian is a CU, so coverage is up to $250K per insured category. GICs, ISAs, etc, are all totalled together for this coverage.
The next best thing is to see if he can open a joint account. This would increase his exposed cash coverage to $500K ($250K in mother's name, $250K in joint account). RRSP is covered separately, and is infinite... no limit, likewise for TFSA.
Meridian does not have a brokerage firm. They are associated with QTrade. So you are likely correct that the POA will not apply, if it truly is a bank specific POA.
12:39 am
April 6, 2013
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Qtrade Direct Investing is a division of Aviso Financial Inc. Qtrade is not a division of Meridian Credit Union Limited.
If the friend only has a limited power of attorney from his mother for dealing with her accounts at Meridan Credit Union Limited, then he has no legal authority to act on her behalf anywhere else, like at Aviso Financial Inc.
5:33 am
September 30, 2017
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Did #2 said "coverage is up to $250K per insured category"? … similar to CDIC categories?
6:42 am
February 7, 2019
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hwyc said
Did #2 said "coverage is up to $250K per insured category"? … similar to CDIC categories?
Kinda ...
See the FSRA brochure @ https://www.fsrao.ca/media/1906/download ...
| CGO |
6:54 am
November 8, 2018
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hwyc said
Did #2 said "coverage is up to $250K per insured category"? … similar to CDIC categories?
With additional caveat:
The liability of FSRA to insure deposits held at Ontario credit unions is limited to the assets of the Deposit Insurance Reserve Fund.
In theory, the government can print enough money to provide 100% CDIC coverage payout for everyone covered by it.
DIRF can not guarantee that, as it is limited by funds in it.
11:26 am
October 21, 2013
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He did ask Meridian about a joint account but they would not open it without the mother being present to sign, which is impossible.
There is a broader POA, from lawyer's office, but nobody seems to want to accept that unless a doctor declares her incompetent. Doctors are generally reluctant and he is also reluctant to do this. From what I've heard , it seems that she likely is incompetent and may not be able to sign her name. Perhaps doctors are afraid of having to defend their decision in court at some point, if it should come to that?
11:56 am
October 27, 2013
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Loonie said
There is a broader POA, from lawyer's office, but nobody seems to want to accept that unless a doctor declares her incompetent.
It depends on type of POA. An Enduring POA is in effect immediately upon signature and continues regardless of when the grantor becomes incompetent. No declaration of incompetency is required.
That aside, I have heard anecdotally in forums such as this one that FIs are sometimes reluctant to accept an all encompassing Enduring POA preferring use of their own FI's POA. That is pure bullshite and I would have a lawyer laying the lumber over any FI that did not accept a broadly applicable Enduring POA. The FIs simply have no legal grounds to stand on to refuse a broadly applicable Enduring POA.
12:07 pm
September 11, 2013
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Each FI has its own policies. For example, here's TD's info re why they might not accept a POA:
In some circumstances, we may not be able to accept the POA or allow the attorney to complete the transaction requested, or we may not follow the attorney's instructions. This could include situations where:
we cannot verify your identity or that of your attorney;
the POA provided does not meet the applicable provincial or territorial requirements (e.g. improper or missing witness signature);
your attorney’s instructions are outside the terms of the POA;
your attorney’s instructions do not appear, in our judgment, to be in your best interest or we have concerns about potential financial abuse; or
your attorney's instructions are in conflict with one or more of our policies or procedures.
If we do not accept the POA or the instructions your attorney provides, we will, where appropriate, provide you or your attorney with the details why and, where appropriate, we will recommend how the issues may be resolved. If you or your attorney has additional concerns, you can follow our complaint handling process which is available at td.com/to-our-customers/resolving-your-problems/comments.jsp and in the TD brochure, If you have a problem or concern.
3:47 pm
April 6, 2013
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Loonie said
He did ask Meridian about a joint account but they would not open it without the mother being present to sign, which is impossible.
…
Any bank would be suspicious of the attorney trying to make himself joint on an existing account or create a new joint account, where he is joint with the donor of the POA:
Powers of attorney: opening a bank account
…
Unless you consent, banks will generally refuse any request by your Attorney to make your account a joint account, because that changes the ownership of your assets to the Attorney. With the authority of the POA, the Attorney can do your banking for you without becoming a co-owner of the account. …
6:51 pm
April 6, 2013
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Loonie said
There is a broader POA, from lawyer's office, but nobody seems to want to accept that unless a doctor declares her incompetent.
Sound like that POA has triggering conditions.
Doctors are generally reluctant and he is also reluctant to do this. From what I've heard , it seems that she likely is incompetent and may not be able to sign her name. Perhaps doctors are afraid of having to defend their decision in court at some point, if it should come to that?
Yes. The well-meaning doctor could be found to be not qualified to make a determination of legal capacity.
Capacity assessments: Understanding the challenges for physicians explains the difference between assessing "capacity in their day-to-day practices for the purpose of obtaining informed consent to care" and assessing capacity for non-treatment matters like making sound financial decisions.
6:57 pm
October 27, 2013
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Norman1 said
Loonie said
There is a broader POA, from lawyer's office, but nobody seems to want to accept that unless a doctor declares her incompetent.
Sound like that POA has triggering conditions.
That does appear to be the case. This kind of POA is not very useful in my opinion for the reasons noted. Over the years that I have done a number of POAs, too many lawyers do not cover that complication nearly well enough. I have always only ever done Enduring POAs.
I suspect Loonie's friend is stuck with the accounts that are in place at Meridian. My take would not to be overly concerned about lack of full FSRA deposit insurance coverage.
7:41 pm
October 21, 2013
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I dd see the signed POA a while back, and there were no conditions that would require some authority to verify incapacity. I don't recall any conditions at all except to say that the mother had to be incapacitated or words to that effect. There was nothing that said how this was to be established or who could do so.
Yes, this may be a hopeless case. Very frustrating though. I'm sure they had no idea what a mess they were getting into.
8:46 pm
October 27, 2013
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If it has any language such as "except to say that the mother had to be incapacitated or words to that effect", it takes a medical determination to trigger activation. This is called a 'springing POA" which is triggered upon certain conditions.
An Enduring POA would say (and mine says) something like "I declare that the authority of my attorney continues despite any incapability on my part, and that my attorney may exercise authority while I am capable or incapable of making decisions about my financial affairs."
8:22 am
October 7, 2018
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Just a thought…
If Meridian has Agility FX as a payee, then perhaps You as POA could create an Agility account, connect Meridian as a source account (at Agility) and a USD account at another FI and make it a receiving account. Then “pay” Agility from Meridian and receive USD at the other FI. Then convert back from USD to CAD. Conversion cost for converting twice would be a total of less than 1%.
9:14 am
September 11, 2013
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Here is some federal gov't info on POAs, and joint accounts, may be useful to some:
https://www.canada.ca/en/employment-social-development/corporate/seniors/forum/power-attorney-financial.html
I have acted as POA in a few instances, I only accepted if there was wording to the effect in 2nd paragraph of post #14, had no interest in running around trying to get someone to certify the moment my job starts. I had other conditions too, e.g. making sure with FI that the POA would be accepted by them. A POA is a powerful document, before you execute it make sure to do it properly to ensure it'll smoothly work and as you intend, is my opinion.
10:08 am
April 6, 2013
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Loonie said
I dd see the signed POA a while back, and there were no conditions that would require some authority to verify incapacity. I don't recall any conditions at all except to say that the mother had to be incapacitated or words to that effect. There was nothing that said how this was to be established or who could do so.
…
That's the triggering condition. The trigger doesn't need to contain an exhaustive list of directives if the intent was to use the definition of incapacity established legally by legislation or court cases.
As AltaRed noted, the donor is not considered legally incapacitated just because the appointed POA says so. If that was the intent, then the POA should have been worded to specifically allow the appointed POA to make that declaration to trigger the POA appointment.
That is why no-one, including Meridian CU, will accept that POA by itself. Next step is to contact a lawyer, like the one who prepared the POA. The lawyer likely will know of a doctor or specialist who can declare that the mother has lost legal capacity and trigger the POA.
1:05 pm
October 21, 2013
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Thanks for that insight, Norman; it makes sense and I should have thought of it.
However, I'm no sure any medical specialist can or will do this. The last time I personally had to deal with a similar issue in Ontario about ten years ago was over POA for personal care. A psychiatrist and a gerontologist both refused, and it eventually turned out that the only person designated to do it was someone who'd done a short course on it and was so designated by the provincial home care agency - and she was a nurse.
2:09 pm
October 27, 2013
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This thread is a good reminder/lesson for those considering 'springing' POAs that have trigger conditions like incapacity. They are quite hard to trigger, as Norman1 has articulated, due to liability issues on the individual validating the trigger. Why lawyers don't do a better job on advising clients on that likely difficulty has always remained a mystery to me.
Conversely, I have found lawyers provide plenty of cautionary comments on clients signing Enduring POAs... which is appropriate to make sure their clients understand the powers being granted. Perhaps this is a case of them covering their own butts if an Enduring POA goes bad and they find themselves being sued. My view of an Enduring POA is that if I am already ready to accept and trust that my POA will act in my best interests when I am eventually in lala land, I should be able to trust my POA for not going rogue on me while I am still competent today.
12:25 am
April 6, 2013
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In Ontario, a capacity assessor can be a doctor, nurse, psychologist, social worker, or occupational therapist who has the required training from the Capacity Assessment Office.
The Ontario government maintains a List of capacity assessors.
Please write your comments in the forum.