What Are the Powers of a Mandatary Holding a Power of Attorney?
A Power of Attorney is one of the most commonly used legal tools in Quebec. It allows one person, called the mandator, to authorize another person, known as the mandatary, to act on their behalf. However, many people mistakenly believe that a Power of Attorney gives unlimited authority over another person’s affairs. Under Quebec law, this is not the case.
The powers of a mandatary holding a Power of Attorney depend entirely on the wording of the document and the instructions given by the mandator. Understanding the scope and limits of these powers is essential for anyone granting or accepting a Power of Attorney.
What is a Power of Attorney in Quebec?
A Power of Attorney (often referred to as a procuration in French) is a contract by which one person authorizes another to perform specific legal acts on their behalf while the mandator remains legally capable.
Unlike a Protection Mandate (Mandate in Anticipation of Incapacity), a Power of Attorney generally ceases to be effective once the mandator becomes incapable of managing their affairs, unless the law provides otherwise for a specific transaction.
What powers can a mandatary have?
The powers of a mandatary are determined by the Power of Attorney itself. The document may grant broad authority or limit the mandatary to specific tasks.
Common powers include:
- Managing bank accounts;
- Paying bills and outstanding debts;
- Collecting pensions or other income;
- Signing contracts;
- Buying or selling property if expressly authorized;
- Managing investments;
- Handling tax matters;
- Representing the mandator before government agencies or financial institutions;
- Managing rental properties;
- Conducting business transactions.
A mandatary may only perform the acts specifically authorized by the Power of Attorney. If the document limits the authority to certain transactions, the mandatary cannot exceed those limits.
Can a mandatary make any decision they want?
No.
A mandatary holding a Power of Attorney must always act according to the instructions of the mandator and in the mandator’s best interests.
The mandatary does not become the owner of the mandator’s property and cannot treat the assets as their own.
For example, unless the Power of Attorney clearly authorizes it and the law permits it, the mandatary should not:
- Transfer the mandator’s assets for personal benefit;
- Make gifts using the mandator’s money;
- Use bank accounts for personal expenses;
- Change the mandator’s will;
- Make decisions beyond the authority granted.
Fiduciary obligations of a mandatary
Quebec law imposes important legal obligations on every mandatary.
The mandatary must:
- Act honestly and in good faith;
- Exercise prudence and diligence;
- Follow the instructions contained in the Power of Attorney;
- Avoid conflicts of interest;
- Keep the mandator’s property separate from their own;
- Maintain appropriate records of financial transactions;
- Be able to account for the management of the mandator’s affairs when required.
These obligations exist even when the mandatary is a close family member.
Can a mandatary sell the mandator’s property?
Possibly.
A mandatary may sell real estate or other valuable property only if the Power of Attorney grants sufficient authority to do so.
Many financial institutions and land registries carefully examine Powers of Attorney before accepting transactions involving immovable property.
When in doubt, legal advice should be obtained before completing the transaction.
Does a Power of Attorney allow the mandatary to make medical decisions?
Generally, no.
A standard financial Power of Attorney usually concerns property and financial matters.
Medical decisions are governed by different legal rules under Quebec law. Depending on the circumstances, consent to care may be given by the capable person, an authorized representative, or another person recognized by law.
What happens if the mandatary abuses their powers?
Unfortunately, abuse of a Power of Attorney can occur.
Examples include:
- Taking money without authorization;
- Selling property for personal gain;
- Hiding financial information;
- Refusing to account for transactions;
- Pressuring the mandator into signing documents;
- Acting outside the powers granted.
A mandatary who abuses their authority may face serious civil consequences and, in some situations, criminal liability.
Possible legal remedies may include:
- Revoking the Power of Attorney;
- Demanding a full accounting;
- Recovering misappropriated funds;
- Seeking compensation for financial losses;
- Requesting court intervention.
The appropriate remedy depends on the specific facts of each case.
Can the mandator revoke a Power of Attorney?
Yes.
As long as the mandator remains legally capable, they may generally revoke or modify the Power of Attorney at any time.
It is also advisable to notify financial institutions and any third parties who relied on the previous document.
What happens if the mandator becomes incapable?
In most cases, a regular Power of Attorney is no longer sufficient once the mandator loses capacity.
At that stage, it may become necessary to homologate a Protection Mandate or establish a tutorship under Quebec law, depending on the circumstances.
When should you consult a lawyer?
Questions concerning the powers of a mandatary, the interpretation of a Power of Attorney, or suspected abuse often require legal analysis.
A lawyer can:
- Review the wording of the Power of Attorney;
- Determine whether the mandatary acted within their authority;
- Advise on fiduciary obligations;
- Assist in revoking a Power of Attorney;
- Recover assets that have been improperly used;
- Represent you in court proceedings if necessary.
Understanding the powers of a mandatary holding a Power of Attorney is essential for protecting both the person granting the authority and the person receiving it. While a Power of Attorney is an extremely useful legal instrument, it does not grant unlimited control. The mandatary must always respect the limits of the document, comply with Quebec law, and act solely in the best interests of the mandator.
This text is provided for legal information purposes only. If you have a specific question regarding your personal situation, please contact a lawyer.
Allen Madelin Avocats offer consultations both in person and via videoconference. The first consultation is offered for $125.For more information, please contact us by telephone: 1 514 904 4017 or by e-mail: [email protected].
