By Patrick McMurchy
An elderly parent may wish to dispose of property by way of gifts during their lifetime or make a new will. They may also want to pass property outside the estate by creating joint ownership of real estate and bank accounts, or by designating beneficiaries of RRSPs or other financial investments.
It’s common for an adult child to help their elderly parent with these financial arrangements, and these arrangements may be wise decisions made for the purposes of estate planning.
But for the lawyer involved, these circumstances raise the possibility that undue influence, coercion or manipulation may be at play. If these elements are found, they will not only render the transaction ineffective, but parties affected may be able to sue the lawyer for failing to protect the elderly client.
Under the Wills, Estates and Succession Act, passed in B.C. in 2014, the presumption of undue influence is raised where there is even the potential of such influence in virtually any transaction involving an elderly parent and adult child. So now, more than ever, the lawyer has a duty to protect against undue influence in these situations.
The solicitor taking instructions from the elderly parent must not ignore warning signs such as their client’s health, advanced age and the degree of dependence the client has with a child, the indicia of the potential for undue influence. If they do, the solicitor may be found negligent in failing to protect their client and may be sued for damages by those affected.
Essentially, the lawyer must be ensure they have instructions based on the wishes and direction of the elderly client and not the helpful child. This is especially true where a solicitor is acting for both the parent and child in the same matter, which often happens in a “simple” conveyance of real estate.
Apart from undue influence concerns, care must be taken by the lawyer to ensure an elderly client understands the nature and significance of the actions to be taken, or documents to be signed.
In one such case, the solicitor was acting for both the mother and daughter in a conveyance. The mother an elderly lady was given papers to sign by the solicitor. She thought she signing papers to help her daughter get a small loan, while in fact, she was transferring title in her property to the daughter. For failing to make sure that his elderly client knew what she was signing, the lawyer was found negligent, in breach of the duty of care owed to his elderly client and to have acted in a conflict of interest.
This short article is intended to give the reader a general understanding of some of the basic principles respecting potential liability of lawyers and the risks involved in helping an elderly parent. It is not intended as legal advice. In estate litigation outcomes very much depend on the specific facts of each case.