Suspect a Sibling Took Money From Mom or Dad Before They Died?

It often surfaces after the funeral: the bank balance is far lower than expected, the house was refinanced, or a sibling who handled Mom's or Dad's banking can't explain where the money went.

In BC, the right to question those transactions passes to the estate. This article explains what the executor can demand from a sibling who acted under a power of attorney, what the law allows an attorney to do with a parent's money, and the limitation rules that can cut a claim off.

Where suspicion usually starts

Most of these disputes involve a sibling who had legitimate access to a parent's money: an attorney under an enduring power of attorney, a joint account holder, or the child who lived nearby and "helped with the bills". The worry is rarely one transaction. It is a pattern: regular cash withdrawals, cheques to the sibling, a car or renovation paid from the parent's account, or a property transfer or new mortgage late in life.

Access alone is not wrongdoing. Some payments may have been reimbursed expenses, genuine gifts the parent wanted to make, or money spent on the parent's care. The point of the first stage is to find out which is which, and the estate has tools to do that.

What a sibling acting under a power of attorney was allowed to do

BC's Power of Attorney Act sets firm rules for an attorney acting under an enduring power of attorney. Under section 19, the attorney must act honestly and in good faith, act in the parent's best interests, keep the parent's property separate from their own (jointly owned property is an exception unless the document says otherwise), and keep prescribed records.

• Records. The Power of Attorney Regulation requires the attorney to list the parent's property and debts when they start acting and to keep accounts and the invoices, bank statements and other records needed to create full accounts of money received and paid out.
• Gifts and loans. Under section 20, an attorney may make gifts or loans from the parent's money only if the power of attorney permits it, or if three conditions are all met, including a yearly cap. The regulation sets that cap at the lesser of 10% of the parent's taxable income for the previous year and $5,000. The attorney can receive a gift or loan personally only if the document expressly permits it.
• Pay. An attorney cannot be paid for acting unless the power of attorney expressly authorizes it and sets the amount or rate (section 24). Reasonable expenses can be reimbursed.
• Death ends it. The power of attorney terminates when the parent dies (section 30). Any withdrawals or transfers by the attorney after death are not authorized by it.

Measured against those rules, "Mom said I could have it" is often not enough on its own. Whether a payment was permitted depends on the wording of the document and the records behind it.

What the executor can demand

Under the Wills, Estates and Succession Act, the executor has the same authority over the estate that the parent would have had if living (section 142) and may start or continue any proceeding the parent could have brought, with the same rights and remedies (section 150). The Power of Attorney Act requires an attorney to produce records for inspection and copying at the parent's request; once the parent has died, the executor generally stands in the parent's place for that purpose.

In practice, the executor usually:

• Asks in writing for the attorney's records and a full accounting for the period they acted, including the opening list of assets and debts.
• Gathers the estate's own evidence from banks, investment firms and the Land Title Office, which typically requires the grant of probate or administration.
• Applies to the BC Supreme Court if records are refused or incomplete, seeking an order that the former attorney account for the money and repay anything not properly spent for the parent.

Joint accounts raise a separate question: whether the surviving sibling owns the balance or holds it for the estate. Our article on joint accounts and resulting trusts after death explains how BC courts approach that issue.

When the sibling is also the executor

The hardest version of this problem is when the sibling who managed the money is now the executor and has no interest in investigating themselves. Beneficiaries are not stuck. Section 151 of the Wills, Estates and Succession Act lets a beneficiary or intestate heir, with the court's leave, bring a claim on behalf of the estate to recover property or enforce an obligation owed to the parent. To get leave, the beneficiary must have made reasonable efforts to get the executor to act, given notice, and be acting in good faith, and the court must consider the claim necessary or expedient to protect the estate or the beneficiary's interests.

In some cases the better step is to ask the court to remove or replace the executor because of the conflict. Our overview of sibling estate disputes in BC covers how these conflicts tend to unfold.

Limitation periods: do not wait for certainty

BC's Limitation Act generally requires a court claim within two years after the claim is discovered (section 6), meaning the day a person knew or reasonably ought to have known that loss occurred, who caused it, and that a court proceeding would be an appropriate remedy (section 8). Three points matter in sibling cases:

• The clock may have started during your parent's life. A claim made through someone else, such as an estate claiming through the deceased, is discovered on the earlier of the day the deceased discovered it and the day the person now claiming did (section 17). If your parent knew about a transfer and objected, time may already have run.
• Fraud and trust property have special rules. Claims based on fraud, or to recover trust property a trustee kept or converted, are discovered only when the beneficiary becomes fully aware of the relevant facts (section 12). Whether a sibling attorney counts as a trustee for this rule is a legal question for your lawyer.
• There is an outer limit. Most claims are barred 15 years after the act or omission, whatever the discovery date (section 21), although wilful concealment can postpone it.

Because these rules interact, get advice on the timing as soon as you have real concerns, even before the paperwork is complete.

Keep the dispute proportionate

A demand for records sometimes resolves things: payments turn out to be care costs, or the sibling agrees to repay a share. Where it does not, a court claim can be costly and slow, and costs can affect what everyone ultimately receives. A lawyer can help you weigh the amount at stake against the evidence and the cost of pursuing it. For the wider picture, see our guide to estate disputes in BC.

Worried about money missing from a parent's estate?

Our probate and estate lawyers can review the power of attorney and the records, help an executor or beneficiary demand an accounting, and advise on recovery steps and limitation dates.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.