How much power do powers of attorney really have?

By Keith Masterman | February 7, 2017 | Last updated on September 21, 2023
4 min read

Bob has made an appointment to see Maria, a financial advisor. Maria has not met Bob, but his name rings a bell. As it turns out, Bob holds the power of attorney for his Aunt Gertrude. Gertrude has been a longtime client of Maria’s. Bob tells Maria that his aunt has recently been declared incapable of managing her financial affairs and he is her attorney. When they meet, Bob provides Maria with a copy of the PoA.

Bob is anxious to make changes to Gertrude’s portfolio. In addition, he wants to gift some of Gertrude’s funds to himself and his cousins. After all, he tells Maria, “My aunt won’t need the money; she is very comfortable,” pointing out that he and his cousins could really use the money. He also wants to make a gift to Gertrude’s church on her behalf. Maria knows that Gertrude donates to the church each Christmas.

Read: How to make a Power of Attorney ironclad

Bob also wants to change the beneficiary designations on Gertrude’s RRIF. Currently, the beneficiary is Gertrude’s estate, and Bob wants to change it to himself. He explains this is so the funds do not get tied up in the probate process after Gertrude dies.

Bob wants to discuss how these steps will impact Gertrude’s estate plan and taxes. Bob has not provided a copy of Gertrude’s will and Maria has never seen it. Gertrude was always private, so her lack of sharing is not surprising. But Maria is hesitant. Does Bob have the legal ability to take these steps? Can a person acting under a PoA make gifts or change beneficiary designations?

Read: Prepare for client incapacity

Gifting assets

An attorney is a fiduciary for the person who granted the PoA, and fundamentally must act in the person’s best interest. Gifting Gertrude’s funds reduces her assets and would seem contrary to this fundamental duty. However, in most provinces, Bob may be able to make gifts.

The first place to turn is the provincial legislation where the grantor resides. Most provinces provide that in limited circumstances, an attorney such as Bob may make a gift or a loan to the grantor’s friends and relatives, and a gift to a charity.

Usually the legislation only permits gifts where Gertrude’s remaining assets will be sufficient to satisfy her basic needs and where there is evidence she would have made the gift had she been competent. With respect to charitable gifts, usually provincial legislation allows the gift only if Gertrude authorized it in her PoA or if there’s evidence she made similar gifts when capable.

Read: Why clients may need multiple cross-border PoAs

A careful reading of the governing legislation in the particular province is required, however, as there are variations. For instance, in Saskatchewan gifts are limited to $1,000 and the attorney is specifically prevented from making gifts to himself, subject to any specific authority granted in the PoA itself. In Ontario, charitable gifts are limited to 20% of the income of the property of the grantor in any particular year and any maximum set out in the PoA, whichever is lower.

Therefore, before they can proceed, Maria and Bob should review both the PoA and the provincial legislation. They should also review Gertrude’s will to ensure that any gifts would be consistent with her estate plan.

Even if the gift is authorized by the PoA and the legislation, Bob should proceed cautiously. The courts have reviewed gifting by an attorney in several cases:

  • In Westfall v. Kovacec Estate (2001), the Ontario Court of Justice did not authorize the gift. The attorney argued that the gift was small, the attorney really needed the money, the incapable person did not require the money, and that the attorney was likely to eventually inherit. The court, however, said these grounds are no more justifiable than theft. The stated reasons were not consistent with the provincial legislation as there was no evidence the giftor would have made the gift if competent.
  • In Laird v. Mulholland (1998), on the other hand, the Ontario court allowed a $10,000 gift to the attorney and his wife, who were longtime friends of the incapable person. The attorney was able to show that the incapable person often made generous birthday and Christmas gifts to the attorney and his family.

Changing the RRIF beneficiary designation

As far as the RRIF is concerned, Bob appears to be out of luck. The general consensus is that a beneficiary designation on life insurance policies, pensions, RRSPs, RRIFs and TFSAs is a testamentary disposition, and thus cannot be completed by a PoA in any circumstances. That said, British Columbia has softened its rules and allows a PoA to continue an existing designation either on the transfer in of a registered plan from another financial institution, or on transition of one plan type to another. Regardless, the courts have also taken a hard stance against such changes.

Read: Don’t let courts choose who gets dead clients’ RRIFs


Maria and Bob both have to proceed carefully to avoid breaching his duty to his aunt. Failing to review the legislation and the PoA document can lead to liability for both Maria and Bob, and could ruin Bob’s family harmony as relatives question the gifts.

Keith Masterman

Keith Masterman, LLB, TEP, is vice-president, Tax, Retirement and Estate Planning at CI Global Asset Management. He can be reached at