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CIBC Power of Attorney

Table of Contents

I. Personal Ethics Statement ................................................................................................... 3

II. Executive Summary ............................................................................................................. 3

III. Introduction .......................................................................................................................... 5

IV. Description and Explanation .............................................................................................. 10

V. Application of Legal Principles ......................................................................................... 27

VI. Recommendations .............................................................................................................. 37

VII. Scenario with Application of Agreement .......................................................................... 40

VIII. Document Attached ........................................................................................................... 45

I. Personal Ethics Statement

II. Executive Summary

A power of attorney is a legal document in which an individual assigns one or more persons,

known as an “Attorney”, the authority to act on his or her behalf regarding financial or legal

matters for property1. The person appointing the Attorney is known as the Grantor. It is

important to have plan for the future and to plan for contingencies, especially if they relate to

one’s physical and mental health. For some people, a power of attorney is a helpful means that

allows them to have a peace of mind, knowing there is a plan for their economic future if they

encounter future health challenges. In fact, people can request a power of attorney from their

bank. As individuals make the decision to request for a power of decision from their bank, it is

crucial for the institution to establish the laws, rules, and obligations to protect themselves from

any liability and to protect the individuals involved in the agreement from any unethical

activities. It is also important for the individuals to read and understand every single word,

clause, and policy in a power of attorney agreement before signing the form. The main topic to

be examined is to analyze Canadian Imperial Bank of Commerce’s (CIBC) Power of Attorney

form and to grasp an understanding of what a Power of Attorney is.

1 Understanding Powers of Attorney and Joint Accounts. In CIBC. Retrieved from

https://www.cibc.com/en/personal-banking/advice-centre/protect-whats-important/estate-with-power-of-

attorney.html

The policies and terms and conditions of CIBC’s Power of Attorney is written in conjunction

with the laws of Ontario. The purpose of this written legal agreement is to protect individuals

against any unfair and unethical business practices. Many different legal principles are connected

with the Power of Attorney agreement written by CIBC. Legal principles such as the

transference of risk to the individuals once they sign the form, the liabilities of the Grantor and

the Attorney, and fiduciary duty where the Grantor trusts the Attorney that he or she appointed to

carry out the specified duties, to make decision in his or her best interest, and to act on his or her

behalf in specific legal and financial matters. The agreement is used to establish rules and

obligations and to ensure proper resolution for when problems arise. Elements such as trust,

loyalty, protection, privacy and information are important components of a Power of Attorney

agreement. The following recommendations are:

1. The Grantor should do his or her own research about Powers of Attorney

2. The Grantor and the Attorney(s) should seek independent legal advice

3. The Grantor should choose his or her Attorney(s) carefully

4. The Attorney should document each financial transaction made on behalf of the Grantor

5. The Grantor and the Attorney(s) should keep track of policy changes in the Power of

Attorney agreement

The Grantor has placed immense trust in the Attorney(s) that he or she has granted power of

their personal affairs. On the other hand, the Attorney(s) has a great deal of responsibility on

their hands. With the help of the law, the Grantor and the Attorney(s) can have a better

understanding of their rights in a Power of Attorney as well as their duties, obligations, and

liabilities. It is crucial that both parties know and understand the agreement that they are signing

and agreeing to because when problems arise, they need to know how to handle the situation and

how to get out of the situation.

III. Introduction

The term paper will be covering the clauses dealing with business issues applicable in

Ontario of a Canadian Imperial Bank of Commerce’s (CIBC) Power of Attorney agreement. The

main purpose is to analyze CIBC’s Power of Attorney terms of agreement and clauses to gain a

better understanding of what the Grantor and the Attorney will be liable for and the types of risks

they will be inheriting if they agree to sign the form. The idea as a Grantor and an Attorney is to

take the time to understand what the agreement contains and to identify the information or

obligations that are missing. Fundamentally, the main purpose is to gain an understanding of

what a Power of Attorney from the bank serves, the termination and cancellation rules, the

liabilities, and how participation works. The topics being covered will be in regards of what

elements make up a Power of Attorney agreement and how these elements contribute to society’s

understanding of the law in terms of power of attorney agreements.

First, a detailed explanation and description of the clauses from CIBC’s Power of

Attorney agreement will be given. The first step is to define what a Power of Attorney is

followed by the analysis of what each clause signifies. The paper will describe and explain what

each clause means and how it is applied to the Grantor and the Attorney. This includes defining

what a power of attorney is, the three types of Power of Attorney and the differences between the

three, and the legal principles involved with signing the agreement. Throughout the analysis, a

critical component is to understand why these rules and regulations were established by making

connections to real life experiences and situations. By viewing different scenario examples and

cases, it will help develop one’s understanding of the importance of each defined clause. The

following section will focus on making connections to other legal laws and acts to see how all

legal legislation are all interconnected. It is important to gain a thorough comprehension of how

all legal principles are unified and how they contribute significance in creating a guideline of

how the agreement should be written. Then next section will discuss recommendations for when

one signs a Power of Attorney agreement. The recommendations will focus on important factors

that a person must look out for when signing a Power of Attorney form. These recommendations

will further give details on the risks the Grantor and the Attorney will be liable for and how they

can avoid trouble and misunderstandings by thoroughly reading the agreement. Moreover, the

best way to grasp and understand information is to apply it to real-life experiences and scenarios.

Demonstrating a real-life scenario helps the reader paint a picture of how to deal with certain

situations and it will be easier to understand when it is connected to and applied in real-life.

After giving a brief outline of what the paper contains, the next step is to define the

methodologies used and the step by step process of writing the paper. According to Del Siegle,

there are three different types of methodologies that are commonly used which consist of

qualitative, quantitative, and research by practitioner2. In this case, majority of this paper will

consist of qualitative methods because it uses historical researching and content analysis. The use

2 Siegle, Del. (2019) “Types of Research.” Educational Research Basics by Del Siegle. Retrieved from https://researchbasics.education.uconn.edu/types-of-research/#

of historical researching helps provide a base and foundation of the type of content that should be

analyzed. Content analysis is significantly used within the paper in order to develop a thorough

understanding of what the clauses in the agreement signify and what they mean to a Grantor and

Attorney. Likewise, it is used to identify the types of legal principles that are associated to the

agreement while also applying analysis to a situation.

Powers of Attorney are extremely important documents that outline what would happen

in the event a person becomes mentally incapable of making their own decisions. A Power of

Attorney allows a person to choose who they want to be dealing their legal and/or financial

matters for them when they are incapable of doing so. However, if problems are not properly

addressed, many legal issues and unfair business practices may occur. A Power of Attorney

involves two parties: a Grantor and an Attorney. An Attorney does not need to be an attorney at

law or a lawyer. With this agreement, a high level of trust must be established because personal

and sensitive information are being disclosed in order to conduct efficient and accurate services.

Ethical issues can be defined as a problem or situation that requires a person or organization to

choose between alternatives that must be evaluated as right (ethical) or wrong (unethical)3. Trust

and collaboration are important factors when it comes to signing a power of attorney agreement.

In a power of attorney agreement, there is a possibility that the Attorney could breach the trust of

the Grantor by mismanaging the financial affairs, using the principal’s money improperly, or

making decisions that are not in the best interest even though they are not legally permitted to do

so. There is also abuse of power from the Attorney. Abuse of power can be defined as the act of

3 Ethical Issue. In BusinessDictionary.com. Retrieved from http://www.businessdictionary.com/definition/ethical- issue.html

using one’s position of power in an abusive way4. This can take many forms, such as taking

advantage of the Grantor, especially since the Grantor is in a vulnerable state. Another form of

abuse of power is breaching the privacy of the Grantor. The Attorney has access to the Grantor’s

personal information and assets, and if the Attorney decides to share their information with other

parties without the consent and knowledge of the Grantor, then they are breaching the privacy of

the Grantor. In addition, the Attorney could also manipulate the Grantor, given that the Grantor

is in a vulnerable position, with the ability to punish them if they do not comply to their orders

or requests. Furthermore, if ever the Grantor and the Attorney end up not being in good terms or

if more than one attorney is appointed, lack of communication and collaboration could lead to

disagreements. These disagreements may then cause delays in the management of financial

matters or the attorney abusing the power that he or she holds. Therefore, it is important for the

Grantor to choose an Attorney whom they can trust completely, shares their values and morals, is

knowledgeable about financial matters, is located near them geographically, for convenience,

and understands and is accepting of the role 5. They can also appoint a trust company, such as

CIBC Trust, as their attorney for property, perhaps jointly with a family or close friend6. The

trust company brings expertise to the relationship, while the family member or friend has a

personal understanding of their motivations and wishes7.

4 Abuse of Power. In BusinessDictionary.com. Retrieved from http://www.businessdictionary.com/definition/abuse-

of-power.html 5 Understanding powers of attorney and joint accounts. In CIBC. Retrieved from https://www.cibc.com/en/personal-

banking/advice-centre/protect-whats-important/estate-with-power-of-attorney.html 6 Understanding powers of attorney and joint accounts. In CIBC. Retrieved from https://www.cibc.com/en/personal- banking/advice-centre/protect-whats-important/estate-with-power-of-attorney.html 7 Understanding powers of attorney and joint accounts. In CIBC. Retrieved from https://www.cibc.com/en/personal- banking/advice-centre/protect-whats-important/estate-with-power-of-attorney.html

Furthermore, the Grantor, the Attorney, the witnesses and the bank are the key

stakeholders in a Power of Attorney agreement. Stakeholders can be defined as an individual or

entity that has an interest or concern in an organization8. The first important business stakeholder

is the Grantor. The Grantor is the person granting the power of attorney agreement over their

own affairs and the person appointing the attorney. The second important business stakeholder is

the Attorney. The Attorney is the person or entity granted the authority to act on the Grantor’s

behalf and to manager their affairs. The Attorney does not have to be a lawyer, as mentioned

above, they can be a family member, a close friend, or a trust company like CIBC trust. The

Grantor can appoint more than one person to serve as their Power of Attorney representative.

Additionally, CIBC’s Power of Attorney requires that the signature of the Grantor must be

witnessed by two adults who are 18 years or older. The witnesses are key stakeholders because

they agree to take on the responsibility of witnessing the Grantor sign the agreement, that later

on, if it is required, he or she can testify that the Grantor was competent at the time he or she

signed the agreement. Lastly, CIBC is also an important business stakeholder because they hold

the agreement. It is CIBC’s Power of Attorney form that the Grantor and the Attorney will be

using and signing. CIBC’s terms and conditions are being used and they address the liabilities

the bank is responsible for and the liabilities the Grantor and the Attorney are responsible for.

8 Stakeholder. In BusinessDictionary.com. Retrieved from

http://www.businessdictionary.com/definition/stakeholder.html

IV. Description and Explanation

A Power of Attorney is a legal document that gives another person the right to make

decisions on one’s behalf. In Ontario, there are three kinds of Power of Attorney which are a

Continuing Power of Attorney for Property, Non-Continuing Power of Attorney for Property,

and a Power of Attorney for Personal Care. A Continuing Power of Attorney for Property covers

one’s financial affairs and allows the person they name to make decisions for them even if they

become mentally incapable9. On the other hand, a Non-Continuing Power of Attorney for

Property covers one’s financial matters but cannot be used if they become mentally incapable10.

They might give this Power of Attorney, for example, if they need someone to look after their

financial transactions while they are away from home for an extended period of time11. Lastly, a

9 Powers of Attorney. In Office of the Public Guardian and Trustee. Retrieved from https://www.attorneygeneral.jus.gov.on.ca/english/family/pgt/livingwillqa.pdf 10 Powers of Attorney. In Office of the Public Guardian and Trustee. Retrieved from https://www.attorneygeneral.jus.gov.on.ca/english/family/pgt/livingwillqa.pdf 11 Powers of Attorney.0p;;0p;0;/ In Office of the Public Guardian and Trustee. Retrieved from https://www.attorneygeneral.jus.gov.on.ca/english/family/pgt/livingwillqa.pdf

Power of Attorney for Personal Care covers one’s personal decisions, such as housing and health

care12. This paper will focus on the Power of Attorney outlined by CIBC.

When signing a CIBC Power of Attorney form, there is an agreement policy that an

individual should be aware of when partaking in this agreement. The beginning of the legal

policy begins with instructions to the Grantor and Attorney. This is where they define what a

Grantor and an Attorney is. The form states that one can use the Power of Attorney to grant the

Attorney the right to carry out transactions in banking and securities at CIBC and its affiliates.

CIBC demands that only one Grantor can use or sign the Power of Attorney, otherwise the

Power of Attorney is invalid. They also mention that an individual does not have to use the form.

In fact, they strongly recommend the Grantor and the Attorney to seek and obtain legal advice on

how a power of attorney works in one’s province or territory and the rights and obligations of the

Grantor and the Attorney. However, if the individual decides to use the form, the Grantor and

Attorney are advised to read it all carefully and each one should discuss it with one’s own legal

advisor. Furthermore, the Grantor and the Attorney are advised to fill out the form with correct

information. CIBC also has the right to decline to act on any instruction or transaction by the

Attorney.

After outlining the instructions for the Grantor and the Attorney, it is followed by the clauses

and legal policies. It outlines the duties and obligations of the Grantor and the Attorney. The first

clause deals with the appointment of attorney. This is where the Grantor fills out the boxes where

they state the name of the Attorney, the Attorney’s relationship to the Grantor, and the

12 Powers of Attorney. In Office of the Public Guardian and Trustee. Retrieved from https://www.attorneygeneral.jus.gov.on.ca/english/family/pgt/livingwillqa.pdf

Attorney’s telephone number. The information that the Grantor provides about the Attorney must

be correct otherwise the Power of Attorney is invalid. By filling out this part, the Grantor

appoints an individual to be their Attorney to act on their behalf and for their benefit on all

transactions and activities related to all banking, investing and securities, which includes

borrowing, that the Grantor can carry out with CIBC13. This means that the Attorney can make

business and financial decisions related to activities with CIBC and with each or all of CIBC and

its affiliates. They can also make decisions about opening accounts and signing documents.

The second clause outlines the limits of Power of Attorney. Although the Attorney has the

power and right to make decisions on behalf of the Grantor, there are limits to that power to

ensure that the Attorney does not abuse that power. The Attorney must act exclusively for the

Grantor’s benefit. The clause explains that the Attorney cannot change or transfer the Grantor’s

assets into joint ownership or into the ownership of the Attorney or other persons14. This means

that the Attorney cannot change how the Grantor’s assets are originally; the Attorney or anyone

else cannot claim ownership of the assets as they belong only to the Grantor. The nature of the

assets is solely to be left alone. The second limitation is that the Attorney cannot set up trusts or

put the Grantor’s assets into trusts however, the Attorney may apply for registered plan or buy

mutual fund units in the name of the Grantor15. This means that the Attorney cannot just set up

trust funds for the Grantor and place their assets there without their permission. The Attorney

must remember that they do not own the account and cannot change the nature of the Grantor’s

assets without their permission. The third limitation is the Attorney’s ability to designate or

13 CIBC Power of Attorney 14 CIBC Power of Attorney 15 CIBC Power of Attorney

change a beneficiary to receive assets on the death of the Grantor on a registered plan or

insurance policy, with the exception that it is allowed under applicable provincial or territorial

legislation16. This means that whoever the Grantor sets out as his or her beneficiary for when

they die, the Attorney cannot change that. The Attorney cannot make decisions regarding the

beneficiary or beneficiaries of the Grantor, unless it is allowed under the applicable provincial or

territorial legislation. This is because it is already set out in the insurance policy or in the

registered plan. It is one less criterion that the Attorney will have to think about. The Grantor has

already established who they want to receive their assets when they die. The fourth limitation is

that the Attorney cannot make transfers, withdrawals or other transactions for personal reasons

that are not for the benefit of the Grantor, which includes gifts to the Attorney themselves and/or

other persons17. The transactions must be reasonable and in the benefit of the Grantor. The

Attorney cannot treat it as if they own the account and they are performing activities on their

own personal benefit. They do not become the owner of the Grantor’s property or money; they

just manage it on their behalf. The Attorney must remember that they have access to someone

else’s account and that the individual trusted them enough to give them access to their personal

accounts. They must treat the accounts with respect and with the Grantor’s personal interests and

benefits in mind. The last limitation states that the Attorney cannot appoint or substitute any

person as the Grantor’s Attorney or entrust any authority of the Attorney18. Whoever the Grantor

appoints as their Attorney, the Attorney cannot change that. In spite of the limits stated, the

Attorney can exercise the subscriber rights of the Grantor for any Registered Education Savings

Plan (RESP) that the Grantor may have, which includes leading out payments that are planned

16 CIBC Power of Attorney 17 CIBC Power of Attorney 18 CIBC Power of Attorney

under the RESP that are not solely for the benefit of the Grantor19. Consequently, it is crucial for

the Attorney to be aware and knowledgeable of these limitations. If he or she fails to comply

with the limitations, there can be consequences for the Attorney.

Moreover, the third clause of the Power of Attorney form explains when the Power of

Attorney takes into effect. The Power of Attorney takes into effect immediately once the form

has been signed and witnessed20. It is to continue despite, and may be exercised during, any

subsequent mental or legal incapacity of the Grantor, including incapacity to manage property21.

The term “mentally incapable” means different things for different types of decisions and

actions. Being incapable of managing property means that a person cannot comprehend

information about their property or finances, or is unable to appreciate what could happen as a

result of making a decision (or not making a decision) about these issues22. The responsibility of

the appointed Attorney begins once the form has been signed and witnessed. They are to

continue to be the Grantor’s attorney when the Grantor is mentally incapable of making

decisions regarding their property or if the Grantor had already been mentally incapable of doing

so.

The next clause of the Power of Attorney of the form states the number of Grantors that can

sign and use the form. As mentioned in the instructions section of the form, the Power of

Attorney is invalid if more than one person signs it as Grantor23. There should be one form for

19 CIBC Power of Attorney 20 CIBC Power of Attorney 21 CIBC Power of Attorney 22 Powers of Attorney. In Office of the Public Guardian and Trustee. Retrieved from

https://www.attorneygeneral.jus.gov.on.ca/english/family/pgt/livingwillqa.pdf 23 CIBC Power of Attorney

one Grantor. The Grantor can appoint more than one Attorney but there can only be one Grantor

per Attorney. The reason for this is perhaps to avoid confusion. For example, if more than one

Grantor signs the form, it might not be clear which Grantor is granting authority to the appointed

Attorney or who the Attorney is responsible of making decisions for.

The fifth clause discusses the other Powers of Attorney. The clause explains that CIBC’s

Power of Attorney does not annul any of the Grantor’s existing powers of attorney, but with

respect to dealing with CIBC, the CIBC Power of Attorney will take precedence over any earlier

powers of attorney the Grantor has made24. If the terms of this Power of Attorney are

inconsistent with the terms of another power of attorney, CIBC may either rely on the terms of

this Power of Attorney, or may decline to rely on any power of attorney that the Grantor has

granted and may require the appointed Attorney or other legal representative to obtain a court

order concerning which power of attorney should govern25. This means that if the Grantor has

other Powers of Attorney outside of CIBC’s Power of Attorney agreement, the CIBC Power of

Attorney will go before the other Powers of Attorney. Additionally, if the terms of the other

Powers of Attorney are not the same as the terms of CIBC’s Power of Attorney, then CIBC can

choose to rely on the terms of their own Power of Attorney, or they can choose neither Powers of

Attorney the Grantor has granted. This is reasonable because CIBC is not an expert of or familiar

with the other Powers of Attorney and cannot make judgements on their agreements. If they

choose the latter, the Attorney of the Grantor or other legal representative can acquire a court

order to determine and settle which power of attorney should administer.

24 CIBC Power of Attorney 25 CIBC Power of Attorney

The sixth clause of the agreement informs the individual that CIBC may decline to act. CIBC

reserves the right to decline to act on any instruction or transaction by the Attorney and CIBC

will not be liable for it26. This means that if the Attorney chooses to perform an activity with

CIBC on behalf of the Grantor, CIBC has the right to decline that said activity. CIBC can choose

not to go through with the activity if they believe or have reasonable doubt that the activity is not

in the best interest of the Grantor or if the activity is in violation of the Attorney’s limits. CIBC

will not be responsible for declining to act on the activity requested by the Attorney. Perhaps, the

reason is to protect the Grantor from harm or injustices. For example, if the Attorney decides to

transfer the Grantor’s assets into a joint ownership, CIBC can refuse the transfer because that is a

violation of the limits of Power of Attorney. That is one activity that the Attorney cannot

perform.

The seventh clause of the Power of Attorney agreement is regarding the actions for the

benefit of the Grantor. The clause states that CIBC is allowed to presume that the Attorney is

acting honestly, in good faith and following the Attorney’s legal obligation to the Grantor,

including that the Attorney must act for the benefit of the Grantor27. CIBC does not have the

obligation to do this, but it may ask the Attorney to justify that any transaction that the Attorney

has requested is, in fact, for the Grantor’s benefit and may decline, without any liability, to carry

out any instruction from the Attorney if CIBC is not satisfied28. This means that the CIBC can

assume that the Attorney is acting and making decisions in the best interest of the Grantor.

However, if under any circumstance, the Attorney wants to carry out a transaction for the

26 CIBC Power of Attorney 27 CIBC Power of Attorney 28 CIBC Power of Attorney

Grantor, CIBC can ask for justification even though they do not have the duty to do so. This is to

ensure that the Attorney has the Grantor’s best interest at heart and is acting for the benefit of the

Grantor. It is to protect the Grantor for any damage, abuse, and injustice in times of where they

are in a vulnerable state. For example, if the Attorney decides to withdraw cash for the Grantor

three times in a week, a CIBC personnel can ask the Attorney for explanation. They can ask the

Attorney the purpose of the withdrawal, what the money is being used for, etc. If CIBC believes

that the justification is not believable, they can refuse to perform said request. CIBC does not

hold any liability which means that they are not responsible for the refusal. CIBC is simply

looking out for the Grantor and is making sure that the Attorney is not abusing their power. This

is an important clause because it reassures the Grantor that if there ever comes a time where the

Attorney is not making decisions in the best interest of the Grantor, CIBC is there to protect them

from these unjust activities going through.

The next clause is regarding notice of termination. The clause mentions that this Power of

Attorney ends upon the Grantor’s death or otherwise at law29. However, CIBC may continue to

deal with the appointed Attorney under this Power of Attorney until CIBC receives notice that

the Power of Attorney has ended30. The notice must be given in writing and in accordance with

any notice requirements in any agreement covering the product or service the Grantor has with

CIBC31. Until that notice, the acts of the Attorney with CIBC will be binding on the Grantor32.

This means that this Power of Attorney agreement ends when the Grantor dies. The Attorney

stops administering the Grantor’s affairs and stops making decision on behalf of the Grantor.

29 CIBC Power of Attorney 30 CIBC Power of Attorney 31 CIBC Power of Attorney 32 CIBC Power of Attorney

This is reasonable as the Grantor no longer benefits from the decisions that the Attorney makes

on their behalf. Another way the Power of Attorney ends is when the law declares that the Power

of Attorney must end. The law could represent the agreement; the agreement specifies the date

that the Power of Attorney is no longer valid. The law could also represent the court. This could

happen if problems occur between the Grantor and the Attorney, and they choose to settle the

problem in court and the court decides that the best solution is to terminate the Power of

Attorney agreement. On another note, CIBC can continue to do business with the appointed

Attorney under this Power of Attorney if CIBC has not received notice that the Power of

Attorney has concluded. Once CIBC receives a written letter affirming that the Power of

Attorney has ended, then that is when CIBC halts its business with the Attorney. The letter must

be in writing. The clause does not specify whether the notice must be written by the Grantor or

the Attorney therefore, it is safe to assume that it can be written by either parties. The notice

must also follow the requirements of the agreement and must cover the product or service that

the Grantor has with CIBC. This is rational because the written letter is a confirmation that the

agreement and the relationship has ended. The termination has been finalized and the letter can

be kept in the records for safe-keeping and for proof.

The following clause is about Attorney Acknowledgement and Indemnity Agreement. The

clause discloses that the Grantor agrees that his or her Attorney must enter into the Attorney

Acknowledgement and Indemnity Agreement included or attached and provide the information

requested and that if his or her/any Attorney does not, CIBC will not accept him/her/them as the

Grantor’s Attorney33. The Attorney Acknowledgement and Indemnity Agreement is attached on

33 CIBC Power of Attorney

the next page of the form. The appointed Attorney must read and understand that section and

sign it. If the chosen Attorney fails to agree and sign it, then CIBC will not accept the individual

as the Grantor’s Attorney. It is important to read and sign it because it completes the agreement.

Failure to comply to the Attorney Acknowledgement and Indemnity Agreement is a sign that the

individual cannot carry the duties of an Attorney. A further explanation of the Attorney

Acknowledgement and Indemnity Agreement will be given in the several following pages.

The tenth clause of the Power of Attorney is the confirmation of acts of Attorney and

Indemnity. The clause articulates that the Grantor agrees to and confirms all acts of his or her

Attorney in connection with this Power of Attorney34. The Grantor will indemnify and hold

harmless CIBC, its directors, officers and employees from any loss, liability or expense that may

incur in acting or declining to act on the instructions of his or her Attorney, including any legal

costs35. The Grantor will pay promptly on demand under this indemnity36. This indemnity is

binding on the Grantor’s estate, heirs and legal representatives37. This means that the Grantor is

aware and liable for the actions of the Attorney in relation with this Power of Attorney. This is

justifiable to a certain degree because the Grantor did choose that individual to be his or her

Attorney for a reason thus, going into the agreement, the Grantor has knowledge of the type of

person that the Attorney is. The Grantor trusts the Attorney as a person and the Grantor trusts

that the Attorney will make decisions in his or her best interest. It is justifiable to a certain degree

because the Grantor should not be responsible for the Attorney’s actions if the Attorney decides

to misuse his or her power. Moreover, the clause also adds that the Grantor will compensate

34 CIBC Power of Attorney 35 CIBC Power of Attorney 36 CIBC Power of Attorney 37 CIBC Power of Attorney

CIBC, its directors, officers and employees for any harm, loss or expense that they could incur,

including any legal costs. CIBC will not be liable for any harm or loss that could they could

incur for acting or for declining to act on the instructions of the Attorney. For example, the

Attorney decides to withdraw money on behalf of the Grantor and CIBC complies with that

transaction. However, the withdrawal of the money was in fact for the Attorney, in other words,

the Attorney has stolen money from the Grantor. CIBC would not be responsible for the loss.

They would not be held liable for acting on the instructions of the Attorney. It is important that

liability is outlined in the agreement because when it comes to accidents, harm, or loss, it is

known who will be responsible for the actions, who will carry out the consequences, and who

will deal with the matter. Additionally, the Grantor will pay CIBC immediately under this

indemnity. The Grantor knows his or her responsibility for when certain circumstances occur and

must act on it as soon as possible. The indemnity is an obligation that cannot be broken by the

Grantor and his or her estate, heirs and legal representatives. The Grantor cannot back out of his

or her responsibility once it has been finalized and he or she has agreed on it. It is a confirmation

of the liability agreement.

The last clause of the agreement is about seeking independent legal advice. The clause

declares that CIBC has informed the Grantor that he or she does not have to use this form of

power of attorney and that he or she should seek independent legal advice before signing this

Power of Attorney38. By signing this Power of Attorney, the Grantor acknowledges that he or she

was advised to seek independent legal advice and that he or she has either sought and received

independent legal advice or declined to do so39. The Grantor understands that CIBC provided

38 CIBC Power of Attorney 39 CIBC Power of Attorney

him or her with this form as a convenience to him or her and the Grantor agrees that CIBC has

no liability for doing that and it is the Grantor’s responsibility, not CIBC’s to make sure he or

she understands the effect and consequences of using this form to appoint his or her Attorney40.

This clause is an affirmation that CIBC has advised the Grantor that they are not forced to use

this form and they should seek independent legal advice regarding Powers of Attorney before

signing the form. CIBC does not know all the rules and regulations of a Power of Attorney. They

simply laid out their own rules and regulations of a Power of Attorney. It is important that the

Grantor seeks out legal advice regarding Powers of Attorney because a Power of Attorney

requires sharing of one’s own personal information. It requires transparency and trust between

two or more individuals. When things go wrong, each individual involved in the Power of

Attorney agreement must know how to get out of that situation. There could be some rights and

obligations that the Grantor might not be aware of because it is not stated in the form. For

example, the clauses and the form do not outline the steps to take for when the Grantor decides

to change the appointed Attorney after having signed the agreement already, or for when the

appointed Attorney dies, or for when the appointed Attorney misuses their power, and many

more. Therefore, seeking legal advice to know one’s rights and obligations in a Power of

Attorney is crucial and would really help the individual in situations where problems occur. The

Grantor can choose to seek legal advice for their own benefit or not, if that is what they prefer.

The form provided by CIBC is merely for the Grantor’s own convenience. The language of the

form is simple and easy to read and understand thus, it is understandable if the individual

chooses not to seek legal advice. This clause is also a confirmation that because CIBC has

advised the Grantor to seek independent legal advice, CIBC is not held accountable for providing

40 CIBC Power of Attorney

the form to the Grantor and for any problems that could occur. CIBC is not legally responsible

for any rights, rules, and obligations that are not articulated in the form. It is also the

responsibility of the Grantor to understand the effect and consequences of using this form to

appoint his or her Attorney. CIBC is not going to be going through each term and agreement

with the Grantor. The Grantor will have to read, analyze, and understand each term and

agreement on their own. They can choose to seek legal advice to help them understand the terms

and agreement of the form. Overall, this is an important clause because it advises the individual

to take precaution before signing an agreement. Seeking legal advice is the best route to take

when it comes to signing agreements, especially if it involves more than one individual, because

when things go wrong, the individual must know how to handle the situation and solve the

problem. Knowing one’s rights and obligations is a power one cannot take away from the other

and it protects one from getting hurt and from any danger, harm, loss, and expense that could

come their way.

After the clauses have been articulated and outlined, there is a section where the Grantor

signs to declare that he or she has read the terms and agreement. The Grantor must state the date

for when he or she has signed the Power of Attorney for confirmation. The Grantor should only

sign the form for when he or she has understood every term and agreement in the form. He or she

must agree to every policy outlined in the form and if there is one thing that the Grantor does not

agree with, he or she should further inquire about it until he or she agrees with it. A Power of

Attorney is a serious matter where the Grantor is basically handing his or her life into someone

else’s hands. Both the Grantor and the Attorney have big responsibilities that they must fulfill

and when it comes to signing an agreement like a Power of Attorney, they must both be on the

same page with every possible matter and circumstance. A Power of Attorney takes time,

thought, and research on both ends.

The following section, after the Grantor has signed the agreement, is titles explanatory notes.

It states that the Grantor’s signature must be witnessed by two adults who are 18 years or older,

who cannot be:

• an attorney the Grantor is appointing, or his or her spouse or common-law partner41;

• the Grantor’s spouse, common-law partner, child or someone he or she has

demonstrated to treat as his or her child42;

• someone whose property is under guardianship now or who has a guardian of the

person43.

This section is to inform the Grantor what makes an individual eligible to be a witness of this

Power of Attorney. The purpose of a witness is that when an individual witnesses the Grantor’s

signature, he or she can later testify that the Grantor was competent at the time he or she

signed44. Without a witness, someone could question the validity of the document, particularly in

cases where the person signing the Power of Attorney has periods of incompetence due to

illness45. It is reasonable that it is required for the witnesses to not be in close relationship or to

have any form of relationship with both parties – the Grantor and the Attorney – because then it

41 CIBC Power of Attorney 42 CIBC Power of Attorney 43 CIBC Power of Attorney 44 Frances, H. The Power of Attorney Rules for Witnesses for a Signing. Retrieved from

https://info.legalzoom.com/power-attorney-rules-witnesses-signing-24600.html 45 Frances, H. The Power of Attorney Rules for Witnesses for a Signing. Retrieved from

https://info.legalzoom.com/power-attorney-rules-witnesses-signing-24600.html

does not form any biases. The witnesses must also be at least at 18 years of age which makes

sense because in Canada, that is the typical age of attaining legal adulthood.

Subsequently, the next section is titled Witness Statement and Signature. This section is

for the witnesses. It states that the witness has no reason to believe that the Grantor is incapable

of giving a continuing power of attorney for property46. The witnesses have signed this Power of

Attorney in the presence of the Grantor whose name appears above and, if two witnesses have

signed, they have signed in the presence of each other47. This section is to confirm that the

witnesses understand their duties and obligations in this Power of Agreement. They have agreed

to bear that responsibility and have witnessed the Grantor sign the agreement. If two witnesses

sign the agreement then each one bears witness, not only of the signature of the Grantor, but also

to each other’s signature. The witnesses must provide their signature, their name, and address.

The witness can also be a CIBC employee and if they are a CIBC employee, then they provide

their signature, their name, and instead of their address, they provide their title.

Furthermore, the following page of the form is the Attorney Acknowledgement and

Indemnity Agreement. This section refers back to the ninth clause of the agreement. The

Attorney Acknowledgement and Indemnity Agreement is for the appointed Attorney. This

section is similar to the clauses outlined for the Grantor, except it is directed towards the

Attorney. When the Attorney signs this segment, he or she agrees that he or she is the appointed

Attorney. He or she knows that this Power of Attorney is valid and has not been revoked. The

appointed Attorney knows and understands his or her duties and obligations under this Power of

46 CIBC Power of Attorney 47 CIBC Power of Attorney

Attorney, as well as the duty to always act in the best interest of the Grantor. The Attorney is

knowledgeable of his or her limits mentioned in the second clause and that he or she must abide

to these limits. By signing this agreement, the Attorney also gives consent to CIBC in collecting,

using, or sharing his or her information as described in CIBC’s privacy policy including for such

purposes as verifying his or her identity, protecting against error or criminal activity or to comply

with legal and regulatory obligation48. Failure to give consent could result in termination of this

Power of Attorney. Additionally, this section also mentions that CIBC has informed the Attorney

to seek independent legal advice regarding this Power of Attorney and that CIBC has no liability

in providing the form to the Attorney49. It is the Attorney’s responsibility, not CIBC’s, to make

sure that he or she understands the effect and consequences of being appointed Attorney on this

form50. It would be beneficial if the Attorney does seek independent legal advice because their

role in this agreement is serious and crucial. When problems occur, they need to know how to

handle the situation and how to solve the problem. To simply put it, when things go wrong, they

need to know how to get out of it. They need to know their rights when agreeing to sign this

form. Moreover, in consideration of CIBC, accepting the Power of Attorney and applying the

Power of Attorney to the Grantor’s accounts and dealings with CIBC, and recognizing that CIBC

is relying on the representations made in his Acknowledgement and Indemnity, the Attorney

agrees to give this Indemnity51. The Attorney is liable for his or her actions and that the Attorney

will compensate CIBC, its directors, officers and employees for any harm, loss or expense that

they could incur, including any legal costs. Similar to the Grantor, this indemnity is binding on

the Attorney’s estate, heirs, and legal representatives. It is important and fair that this section is

48 CIBC Power of Attorney 49 CIBC Power of Attorney 50 CIBC Power of Attorney 51 CIBC Power of Attorney

included because the Attorney needs to be aware of his or her rights, duties and obligations as

well. They have a great responsibility and a crucial role to play once they sign this agreement.

They need to know what they are and are not liable for, as well as how they can protect

themselves when things go wrong. Once the Attorney has read this entire section and has agreed

to every term and condition outlined, they can sign the form. They write their name, date of

birth, occupation, address, telephone number, and their relationship to the Grantor. They must

also verify their identity.

The last page of the form is for CIBC Investor Services Inc. accounts only. There are

three “yes or no” questions being asked. The first question asks, “Are you, your spouse or

common-law partner, any person(s) living in the same home, trading authority, or anyone who

exercises influence on this account an investment industry professional, in other words, do you

or they work for a stock broker/dealer or stock exchange?52” The second question asks, “Are you

an insider of a reporting issuer or any other issuer whose securities are publicly traded? If yes,

list below.53” The third and final question asks, “Do you alone or as part of a group hold more

than 20% or have a control block of a reporting issuer or any other issuer whose securities are

publicly traded? If yes, list below.54” These questions are important for the bank. The purpose of

these questions is for the individual to disclose any information that are relevant to the bank. It is

also to protect the bank from any potential issues or loss. It is completely sensible for CIBC to

ask these questions as the answers that the individual will provide could have an effect on the

bank and could determine the relationship the individual will have with CIBC. CIBC wants to

52 CIBC Power of Attorney 53 CIBC Power of Attorney 54 CIBC Power of Attorney

maintain and create good, trustworthy, and healthy relationships with its clients, and one way of

doing that is by for the client to provide honest, relevant information that the bank requires.

CIBC also has a duty to be honest with its client and to provide quality services. Furthermore,

once the individual has answered all the questions, the Attorney must sign and date the form. In

addition, a witness must provide its signature, name, and address. If the witness is a CIBC

employee, then they provide their title instead of their address.

V. Application of Legal Principles

There are many legal principles that were taught in class and many legal principles that

correlate with one another without us even realizing it. CIBC’S Power of Attorney term and

conditions are based on several legal principles formulated in protecting the best interest of

clients. The following points highlight the various topics discussed in class that relate to the

elements and the terms and agreement of a bank Power of Attorney:

1. The first legal principle is related to business law55. Business law is defined as a set of

established rules governing commercial relationships, including the enforcement of

rights56. Business law covers general rules for commerce such as transactions between

banks and clients. It also outlines the responsibility for losses and damage and encourages

planning to ensure organized agreements and compliance with the agreements. Generally

speaking, a CIBC Power of Attorney is a transaction and a relationship between the bank

and its clients. CIBC’s Power of Attorney form is a written agreement that outlines the

duties and obligations of the individuals involved in the agreement, which includes CIBC

55 DuPlessis, Dorothy, et al. Canadian Business and the Law. Nelson Education, 2017 56 Refer to page 5

itself. For instance, the Attorney Acknowledgement and Indemnity Agreement highlights

the rights, duties and obligations of the Attorney to the Grantor and the bank, the

liabilities they are accountable for that the bank is not, and the limitations of their power.

2. The law is a set of rules and principles intended to guide conduct in society, primarily by

protecting persons and their property, facilitating personal and commercial interactions,

and providing mechanisms for dispute resolution57. Companies and banks will write their

policies and terms and agreement based on the laws that have already been implemented

to ensure that they do not get sued or be held accountable for any unjust market practices.

CIBC writes their legal agreements in conjunction with the provincial law. CIBC’s legal

agreements regarding Power of Attorney provide guidance to the individuals signing the

agreement and ensure that all parties involved, including CIBC, know their liabilities.

The laws provide guidelines to CIBC in defining certain terms, such as “mentally

infirmity or legal incapacity,” and it also protects consumers from unjust market

practices.

3. A contract is a deliberate and complete agreement between two or more competent

person, not necessarily in writing, supported by mutual consideration, to do some act

voluntarily58. By definition, a contract is enforceable in a court of law59. CIBC’s Power

of Attorney agreement is a written contract. The agreement outlines the terms and

conditions, the duties and obligations of the Grantor, Attorney, and witnesses, and the

liabilities of each party. The agreement requires each party’s signatures. It is also

57 Refer to pages 4 to 5 58 Refer to page 97 59 Refer to page 97

enforceable in a court of law. The parties can seek legal advice and can obtain a court

order when problems or disagreements occur.

4. Another legal principle that has been covered in class is a breach in contract. A breach in

contract is when an individual or entity fails to comply to a contractual promise60. When

the Grantor and the Attorney sign CIBC’s Power of Attorney form, they automatically

agree to all the contractual conditions of the agreement. It is the Grantor and the

Attorney’s responsibility to read and understand what they are liable for when signing the

agreement. They should each seek independent legal advice to get a better understanding

of their rights, duties and obligations. They should also understand what CIBC is

responsible for in case a problem occurs. A breach in contract is when a condition has

been breached. Conditions are an important component because it informs both parties

what can and cannot do, and what they are liable for. For instance, the Attorney has an

important responsibility of making decisions on behalf of the Grantor that are in the best

interest of the Grantor. They hold the power but, they do have limitations. If the Attorney

fails to comply with these limitations, there could be legal consequences.

5. Another legal principle that has been discussed in class is contract law. Contract law is

defined as the rule that allows agreements to be binding which encourages planning for

future expectation in the behaviour of other parties61. Contracts are important because

they make transactions happen smoothly and without understandings. It also allows

individual parties to conduct affairs confidently. CIBC’s Power of Attorney form is

essentially a contract because it sets out the duties and obligations of the Grantor and the

Attorney that they must abide by once they sign it. The form plans out the future

60 Refer to page 6 61 Refer to pages 9 to 10.

expectation in the behaviour of the Attorney and once they sign the form, the agreement

becomes binding.

6. Liability is a very important legal principle associated with a variety of laws. Liability is

defined as the official legal responsibility of the event that some form of loss has

occurred62. It is important for a bank to define what they will be liable for and the

limitations of liability they will have over their clients. If they do not specify what they

are accountable for then they are legally and financially liable for any loss, damages, and

expense that occur. CIBC has outlined the liabilities of the Grantor and the Attorney in

the agreement. For instance, the form states that because CIBC has advised both the

Grantor and the Attorney to seek independent legal advice regarding this Power of

Attorney, CIBC is not liable for providing the form to the individuals and for any

problems, loss and expense that could occur. In fact, the Grantor and the Attorney will

compensate CIBC for any loss or expense, including legal costs, the bank incurs.

7. Ethical business requirements are a critical component to keep a business functioning and

to keep competition steady. Business ethics is defined as the moral values and principles

that determine the right or wrong within the business world63. Banks obey the law but,

usually customers want more than just banks following the rules. Customers expect the

bank to cater to their needs, to think in their best interest and to provide services that can

help achieve their goals. In the case of CIBC’s Power of Attorney, most of the time, this

is a business to consumer relationship because the bank is allowing the client to use their

Power of Attorney form. CIBC states small notices and tips within their Power of

62 Refer to page 12 63 Refer to page 13

Attorney agreement to help the client understand and to warn the client of the potential

risks.

8. An agency relationship occurs when one party chooses an individual to represent their

group in the form of legal relations. There are two components that make up an agency

relationship which are: the principal who has allowed another to act on their behalf, and

the agent who is the person authorized to act on behalf of the party 64. A Power of

Attorney acknowledges that agency relationships take place when the Grantor gives an

individual the authority to be their Attorney and to make decisions on their behalf.

CIBC’s Power of Attorney specifies within the agreement that the principal is the Grantor

and the agent is the Attorney.

9. Actual Authority is the power of an agent that derives from either express or implied

agreement65. Express authority is the written or oral authority granted by the principal to

the agent and is an authority that the agent actually has66. Implied authority is also an

authority that the agent actually has, but it is present by implication only67. CIBC’s Power

of Attorney has established that the agent is the appointed Attorney. The power of the

Attorney derives from express agreement because the Grantor has granted them authority

in writing and the form has outlined their duties and obligations.

10. Another legal principle that has been taught in class is fiduciary duty. Fiduciary duty is

when a duty is imposed onto an individual who has or is in a special relationship of trust

with another party. It is one of the duties of an agent. In a Power of Attorney agreement,

the Grantor must trust the individual that he or she is granting authority to act on their

64 Refer to page 295 65 Refer to page 298 66 Refer to page 298 67 Refer to page 298

behalf in specific legal and financial matters. The appointed Attorney has a duty to make

decisions in the best interest of the Grantor. Professional-client relationships are also

classified as a fiduciary relationship because the bank working with the clients has a

responsibility to be honest, loyal, truthful, and to provide them service in their best

interest. CIBC’s Power of Attorney advises individuals multiple times to seek

independent legal advice for their own benefit.

11. Another legal principle relates to one of the duties of an agent which is the notion to

disclose all material information. In a Power of Attorney, the relationship between the

Grantor and the Attorney must be transparent. The Attorney must share all important

information with the Grantor because the Grantor must be able to trust the Attorney fully

that they will make decisions in their best interest. The Grantor is in a position of

vulnerability and he or she is giving another party access to all his or her personal assets

and information. The Attorney must be honest, loyal, and trustworthy.

12. CIBC uses risk transference by transferring the risk to someone else through a contract68.

CIBC transfers the risks onto the Grantor and the Attorney once they have signed and

accepted the terms and conditions. CIBC’s Power of Attorney form states that they

reserve the right to decline to act on any instruction or transaction by the Attorney and

CIBC will not be liable for this69. They have outlined what the Grantor and the Attorney

will be liable for when damages occur.

13. Duty of confidentiality is the responsibility of the professional to not disclose any

information that has been provided by the client without having their consent first70. The

68 Refer to page 54 69 CIBC Power of Attorney 70 Refer to page 576

purpose of this is to ensure the safety and privacy rights of customers who take part in

business with a firm. When a business establishes protection and security for its

customers, it creates good business relationships with the customers, and it builds a good

image in the marketplace which will attract more business. A Power of Attorney requires

the Grantor to share personal information with the Attorney. Since this is a bank Power of

Attorney, it requires the individuals involved in the agreement to share personal

information with the bank. The form states that the individuals must give consent to

CIBC to use their personal information as described in CIBC’s privacy policy including

for such purposes as verifying their identity, protecting against error or criminal activity

or to comply with legal and regulatory obligations.

14. Insurance is when a contract has been established between the insured and insurer71.

Insurance must be a written contract and establish what kind of losses are covered72.

There are three types of insurance: fire insurance, life and disability insurance, and

liability insurance. CIBC’s Power of Attorney outlines the limits of the Attorney and it

addresses that the Attorney cannot designate or change a beneficiary to receive assets on

the death of the Grantor on a registered plan or insurance policy73. This clause is referring

to the life and disability insurance that the Grantor could possibly have.

15. Another legal principle that has been taught in class is torts. Torts can be defined as the

wrongdoing by causing damage or harm which results in legal liability74. Negligence can

be defined as unreasonable conduct which includes a careless action or omission75. The

71 Refer to page 703 72 Refer to page 703 73 CIBC Power of Attorney 74 Refer to page 225 75 Refer to page 225

negligence must cause harm to another party because if there are no damages then it will

not be classified as negligence. There are four factors that must be met in order to be

considered as negligent which are: it has to cause harm, the defendant breached a

standard of care, damage caused by the defendant, and the damage could have been

avoided in that situation76. CIBC has stated in their agreement that the Grantor and the

Attorney will indemnify and hold harmless CIBC and its affiliates from any loss, liability

or expense that they may incur in acting or declining to act on the instructions of the

Attorney, including legal costs77. This means that if either the Grantor or Attorney are

negligent and continues to cause harm under certain circumstances then CIBC is not

responsible for the damages.

16. Another legal principle discussed in class is duty of care. Duty of care is the

responsibility that is owed that would prevent carelessness which could impact others78.

The bank owes duty of care to whomever may be impacted by their Power of Attorney

form agreement. For instance, CIBC must take into consideration how their Power of

Attorney terms and conditions may impact their clients. CIBC has stated within their

agreement that they advise the Grantor and the Attorney to seek independent legal advice

regarding this Power of Attorney so that they can have a better understanding of the

policy. They do not want their clients to sign an agreement they do not fully understand

or to sign an agreement where they do not know their rights and obligations for when

certain circumstances happen.

76 Refer to page 225 77 CIBC Power of Attorney 78 Refer to page 245

17. Neighbour is an essential component in taking into consideration about the duty of care79.

Neighbour is anyone else who could reasonably be affected by the company’s conduct or

regulation. CIBC does not only work with clients but also investors who invest in their

bank. CIBC understands that their investors may be affected by the agreements that occur

in their institution. The agreement ensures that investors will not be responsible for any

issues, loss, or expenses regarding the Power of Attorney agreement.

18. Voluntary assumption risk is the defense that no liability exists as the plaintiff agreed to

accept the risk inherent in the activity80. In this case scenario, the plaintiff will not be

rewarded or given any compensation even if the other party may have been negligent81.

This can only work if and only if the defendant is able to prove that the plaintiff has

known about the potential risks, harm, or consequences82. With CIBC’s Power of

Attorney, once the Grantor and the Attorney sign the form, they have accepted the risks

that could potentially occur in participating in this agreement. CIBC has mentioned that

they will not be liable for any losses, or expenses that could occur because the risks have

transferred to the Grantor and the Authority. They have given their consent to CIBC to

use their personal information and CIBC has advised them to seek legal advice.

19. There are different mechanisms for dispute resolutions and one way that CIBC uses is

called arbitration. Arbitration is defined as a process in which a neutral party makes the

decision in resolving the dispute83. In this case, CIBC’s Power of Attorney states that

when the Grantor has other existing powers of attorney, with respect to dealing with

79 Refer to page 245 to 247 80 Refer to page 252 81 Refer to page 252 82 Refer to page 252 83 Refer to page 75

CIBC, this Power of Attorney will take precedence over any earlier powers of attorney.

However, if the terms of this Power of Attorney are inconsistent with the terms of another

power of Attorney, they can obtain a court order concerning which power of attorney

should govern. This means a neutral party will make the decision as to which power of

attorney will manage the legal and financial affairs of the Grantor and the decision of the

arbitrator is binding.

20. Every business comes with risks that can occur, and legal risks are viewed as a business

risk that involved legal implications84. A factor of a successful business is for them to be

able to forecast any changes in the future and to be able to react to unpredictable events

in the future85. In a Power of Attorney agreement, the individuals involved must be able

to identify the potential risks that may cause costly claims and impact business

relationships or reputation. There are risks involved when an individual is an agreement

with another individual, and it requires sharing of sensitive and personal information.

CIBC’s Power of Attorney agreement has outlined the limitations of the Attorney so that

they do not abuse their power. In addition, the agreement addresses specific

circumstances where they are not liable for any problems, damages, losses, or expenses

that may occur. CIBC has identified the potential risks and has outlined how they are

going to protect themselves from the issues that can occur.

84 Refer to page 46 85 Refer to page 46

VI. Recommendations

When entering in a Power of Attorney agreement, it is important to read and understand the

policies in the agreement. After reading and analyzing the terms and conditions, there are many

details to take into account to ensure that the Grantor and the Attorney understand their duties

and obligations. The first recommendation is to do one’s own research about Powers of Attorney

before reaching out to others and before entering in the agreement. By doing research, the

individual gets a general idea of what a Power of Attorney is and how it works. The individual

should do research on the Power of Attorney according to the province or territory they are in

because the rules and regulations are different in every province and territory. Additionally, the

individual must do research on where they want to sign the Power of Attorney agreement. To

elaborate, they must look into what bank or institution they plan on requesting a Power of

Attorney from. They must consider the policies and terms and condition of the Power of

Attorney of each bank because they may differ. Upon collecting information, they can decide

which bank best fits with their preference and best aligns with their values. However, most of the

time, it is beneficial for the individual to request a Power of Attorney from the bank they are

affiliated with since they have an account with that bank. The bank can provide them guidance

on how to best handle their assets.

The second recommendation is to seek independent legal advice. Although the individual has

done their own research of what a general Power of Attorney agreement is and how it works, it is

not enough. They are not fully competent and knowledgeable on the topic. They do not know all

the laws, duties, and obligations associated with a Power of Attorney. Therefore, the individuals

involved – the Grantor and the Attorney – in a Power of Attorney agreement should seek

independent legal advice. It is important for the individual to have knowledge on their rights

when signing a Power of Attorney agreement. This is because problems can occur when one

signs agreement that involves another individual or individuals and when problems occur, the

individual must know how to handle the situation and must know how to get out of the situation.

Having knowledge of one’s own rights and obligations in an agreement is a power other

individuals or parties cannot take away from. The individuals should sit with a lawyer and go

through the agreement with them. The individuals should understand every single word, clause,

and policy written in the document before signing the agreement. They should be aware of what

is written in the document and what is not. Having legal knowledge will allow individuals to

decide if they really want to participate in the agreement and reflect if they can truly handle the

responsibility. A good lesson to take away is knowledge is power and people cannot take away

one’s knowledge.

The third recommendation is for the Grantor to choose his or her Attorney or Attorneys

carefully. Anyone can be the Grantor’s Attorney under Power; they do not have to be family or

hold any formal qualifications. It is important for the Grantor to choose his or her Attorney(s)

wisely because the person(s) he or she chooses will have a huge amount of decision-making

power as well as difficult responsibilities. The most important thing is to choose someone whom

the Grantor trusts and whom the Grantor shares his or her beliefs. People usually choose their

partner, a child or a sibling to be their Attorney, but it can be anyone whom they find can handle

the responsibility and whom will make decisions with their best interest at heart. The Attorney

does not have be related to the Grantor, they can even choose to have their affiliated bank as

their Attorney, and the Attorney(s) does not need any specific experience or qualifications. It is

also important to discuss with the person they choose how big of a responsibility it is to be their

Attorney under Power. The Grantor should make sure they understand his or her wishes,

preferences and beliefs ahead of time, and that they are comfortable making decision on their

behalf.

The fourth recommendation is for the Attorney to document each financial transaction made

on behalf of the Grantor. Financial record keeping is important because it is key to avoiding and

defending accusations against the Attorney for abuse, financial mismanagement and breaching

their fiduciary duty. A good lesson to take away is that the Attorney has a great deal of

responsibility on their hands and they want to avoid getting into trouble because it could lead to

serious consequences. They should keep financial records on hand until their duties are over.

Breaching their fiduciary duty exposes the Attorney to liability and potential sanctions. The

consequences could be costly and damaging.

The last recommendation is to keep track and up to date with any changes that may occur in

the terms and conditions of the Power of Attorney form. The bank could decide to change the

terms and conditions in the Power of Attorney agreement perhaps because of the changing laws

in society. The bank should inform the individual(s) of these changes. However, it is also the

individual’s or individuals’ responsibility to ask the bank or their lawyer from time to time about

any changes in their Power of Attorney agreement. It is important to take the time to read and

keep up with the changes in the agreement policy because one may be surprised how little the

bank, or the other party may be liable for and how much more responsible the individual

becomes.

VII. Scenario with Application of Agreement

Imagine in a given scenario where a woman named Sarah Johnson was a victim of identity

theft86. It began in late April when her accountant called to say that she had been unable to file

Johnson’s 2018 tax return electronically. The accountant said that the Canada Revenue Agency

(CRA) rejected the file because someone had already submitted Johnson’s return using her

identity and social insurance number. After confirming that a return had been filed in her name,

Johnson reported the incident to the police. She was told, however, that detectives could not

investigate since she had not suffered any direct financial loss. One week later, Johnson received

a letter from her accountant saying that Johnson was victimized by the same tax fraud scheme

experienced by a dozen other clients at her firm. In a subsequent email, the accountant insisted

86 This scenario is based on: Duffy, A. (2019, July 10). Fraudster steals $9,178.22 after Ottawa woman discovers

phoney tax return filed in her name to CRA. Retrieved from https://ottawacitizen.com/news/local-news/ottawa-

woman-victimized-by-identify-theft-and-income-tax-fraud-left-with-few-

answers?fbclid=IwAR3gmG12nbl0v9KoBX2mhO2c5SOm1Pl1qZMWKyWbIH8cnqHPnD9Kp1GbclU

that the accounting firm was not responsible for Johnson’s identity theft and that its computer

system had been compromised. As a result, the accountant said that the accounting firm would

not be filing a police report.

The thief made off with more than $9,000 tax return after convincing the CRA to change

Johnson’s address and bank account number. A taxpayer can change an account by phone after

providing a name, social insurance number, date of birth, address and “account specific

information that only taxpayer and their authorized representatives should have.” Somehow, the

thief was able to answer the security questions the agency uses to affirm a taxpayer’s identity

over the phone. At this point, Johnson still does not know if she will be on the hook for the

$9,000 tax return that was fraudulently obtained in her name.

The first factor to understand in this situation is that in a Power of Attorney, the Grantor is

giving another party the legal authority to act in his or her behalf in order to manage his or her

legal and financial affairs. The power given can be very comprehensive to allow complete

control over all his or her finances and property, or it can be limited to a specific job.

Nevertheless, the appointed Attorney has access to the Grantor’s personal information including

social insurance number and answers to security questions as well as bank account, and personal

assets. A Power of Attorney gives the Attorney extraordinary powers. Unfortunately, misuse of

funds or theft is an all too common occurrence in a Power of Attorney. Too often, for one reason

or another, the Attorney treats the Grantor’s money as their own. Once this occurs, it is evident

that the responsibility has fallen into the wrong hands. This would be considered a breach of trust

and privacy, and abuse of power. The Attorney is not managing the Grantor’s personal assets in

the best interest of the Grantor and is using the Grantor’s personal assets for their own benefit.

They have access to the Grantor’s personal information and are using it for the wrong reasons.

With that being said, it is very much possible and realistic that a case like Johnson, a victim

of identity theft and tax fraud, can occur to the Grantor in a Power of Attorney. The Attorney can

easily call CRA and file the Grantor’s tax without the Grantor knowing because they have the

information needed to file their tax. The person whom the Grantor thought he or she could trust

could commit a malicious crime against the Grantor. One does not know the full potential of

another individual and what they are capable of doing. Therefore, it is important that in a Power

of Attorney agreement, the form outlines what the Attorney can and cannot do. Similar to

CIBC’s Power of Attorney form, it states the limitations of the Power of Attorney.

Furthermore, after Johnson found out someone had stolen her identity, she spent more than

40 hours trying to protect herself against further financial harm. She contacted the major credit

bureaus, Equifax Canada and TransUnion Canada, to request copied of her credit report and to

file fraud warning. Johnsons changed the passwords on her bank accounts and credit cards, and

notified Service Canada about her identity theft. She also discovered that someone opened an

account in her name at Credit karma, an online service that allows people to check their credit

rating. A couple weeks later, she was further worried when a card arrived in the mail from

Motusbank, a new digital bank because she had not opened the account. Johnson declared that

she did not fall prey to a phishing or phone scam. This type of incident can happen to anybody. It

does not matter whether an individual is a middle-class individual or they own millions of

dollars.

There are several ways in which an individual involved in a Power of Attorney agreement

can protect himself or herself from the misuse of a power of attorney. First, the individual should

consult a lawyer before signing a Power of Attorney form. The lawyer can advise the individual

about certain things in a Power of Attorney such as their rights, the rules and obligations, what to

expect in participating in the agreement, changes in state power laws, how they can protect

themselves, how to handle certain situations, and many more. The lawyer can provide the

Grantor information that a Grantor should know in a Power of Attorney agreement. Second, if

the province or territory has rewritten its law, the old power is still valid but, it might not be

interpreted the way one intended. It is important to check if the Power of Attorney is outdated or

not. Having an updated Power of Attorney is one way an individual can protect themselves

because if ever they have to go to court to fight a case, the law aligns with the policy and terms

and conditions in the agreement. Furthermore, the Grantor should pick two Attorneys. Picking an

Attorney one can trust is just as important as having the right form and filling it out correctly.

With two Attorneys, there is a primary one and the secondary Attorney is deemed backup. To

protect oneself, the Grantor should specify the duties of each Attorney. For example, the primary

Attorney can act individually to pay bills and handle other daily matters but, they must act jointly

with the secondary Attorney to sell property or make a gift. It is necessary that for both

Attorneys to be able to sell the Grantor’s house and give away the proceeds, they must sign an

agreement saying that they can perform those deeds. Another way the Grantor can protect

himself or herself is by requiring the Attorney to sign a form agreeing to keep the Grantor’s

assets separate from theirs and to keep a record of what they do on his or her behalf. Lastly, the

Grantor should decide whether he or she wants to give away certain powers such as, making

gifts, changing beneficiaries on his or her retirement accounts and renaming bank accounts as

joint accounts. Even though the powers mentioned beforehand are outlined in CIBC’s limitations

of Power of Attorney, the Grantor can further specify the requirements. They can be as detailed

as possible. These powers can be abused thus, the Grantor should not be too hasty in handing

them these powers.

Moreover, if the Grantor suspects abuse of legal authority to commit a financial crime such

as identity theft, fraud and forgery, there are options available for the Grantor to handle the

situation. The individual can report it to the police and obtain legal counsel. A lawyer

experienced in fraud recovery can help the individual deal with the situation. A lawyer can

determine the appropriate next steps for the Grantor’s particular situation. If these matters are not

dealt with right away, they tend to grow and can carry on even after the Grantor’s death, making

it complicated, lengthy, and costly.

VIII. Document Attached

CIBC Power of Attorney