Consumer’s intentions to gift money while alive could not be confirmed

Ms. A was a senior with serious health issues who had given one of her three daughters Power of Attorney (POA). Ms. A’s daughter arranged a time for them to meet with Mr. G who was Ms. A’s long-standing mutual fund representative at her bank branch.

On the day of the meeting, Ms. A’s daughter attended alone because Ms. A wanted to rest at home. Her daughter told Mr. G that the purpose of the meeting was to transfer Ms. A’s savings to her chequing account and liquidate her mutual funds. The daughter believed that it was her mother’s intention to divide the proceeds of the mutual funds equally between her and her sisters.

Without calling Ms. A to confirm her wishes, Mr. G acted on the daughter’s request to move Ms. A’s savings to Ms. A’s chequing account and sell the mutual funds in Ms. A’s investment account. The daughter told Mr. G that the cash proceeds of over a million dollars should be divided into three bank drafts – one for her and each of her sisters. They agreed to meet the following week, so the daughter could pick up the bank drafts at the branch.

Unexpectedly, the daughter had to postpone the meeting. When she called to reschedule, she was referred to Ms. Z, Mr. G’s colleague, because he was out of the office. The daughter had never met Ms. Z before, and Ms. Z had no prior knowledge of Ms. A’s account. During the meeting, Ms. Z expressed concerns about producing the bank drafts without Ms. A’s written consent in the file and escalated the matter.

Over the next several weeks, the bank sought legal advice. It had been unable to obtain consent for the transfers from Ms. A because she was undergoing medical treatment. Additionally, Mr. G was no longer employed at the bank.

Soon after, Ms. A died with the matter unresolved. As a result, the proceeds in Ms. A’s investment account were included in her estate and subject to probate fees. The probate fees of the estate were assessed at approximately $17,000. When her daughter requested reimbursement of these fees from the bank, the bank refused.

Complaint not upheld

During our investigation, we spoke to Ms. A’s daughter and representatives of the bank. We reviewed the outcome of the bank’s investigation, documentation for Ms. A’s investment account and a copy of Ms. A’s power of attorney. We found no independent evidence to confirm Ms. A’s intention to gift her investment proceeds to her daughters prior to death.

As Ms. A’s attorney under the POA, her daughter was legally required to manage Ms. A’s property in her best interest, which typically does not include the gifting of money to others. When Ms. A’s daughter requested that the bank prepare the documentation to give her mother’s money to her and her sisters, she was in a conflict of interest between her mother’s interests and her own.

After reviewing the evidence, we found that the bank had acted reasonably in requesting instructions directly from Ms. A, and when she was not available, had acted in a timely manner to determine how to proceed. After completing our investigation, we concluded that the bank had acted reasonably in the circumstances and there was no basis for compensation.