Powers of attorney are intended to provide continuity and protection when an individual becomes unable to manage their own financial affairs. In British Columbia, a properly executed enduring power of attorney grants significant authority to the appointed attorney, often including control over bank accounts, investments, real property, and business interests. While this authority is necessary in many circumstances, it also creates the potential for misuse.

In estate litigation, one of the most urgent and consequential situations arises when there is a reasonable concern that an attorney under a power of attorney is dissipating, hiding, or improperly transferring assets. Once funds are moved or assets sold, recovery can be difficult, time-consuming, and costly. In such cases, freezing assets may be the only effective way to preserve the grantor’s estate and prevent irreparable harm.

Why Asset Dissipation Is a Critical Risk in Power of Attorney Disputes

A power of attorney grants legal authority, not ownership. Attorneys are fiduciaries who must act honestly, in good faith, and in the best interests of the adult who granted the power. Despite these obligations, estate litigation frequently reveals situations where attorneys exceed their authority or misuse it altogether.

Typical scenarios include unauthorized withdrawals from bank accounts, the transfer of funds to the attorney or related parties, the sale of real property at undervalue, or the liquidation of investments without a legitimate purpose. In some cases, misconduct occurs gradually. In others, it accelerates once conflict arises within the family or litigation becomes likely.

The core concern in these situations is irreversibility. Once money is spent or assets are transferred beyond the jurisdiction, even a successful court judgment may not result in meaningful recovery. British Columbia courts recognize this risk and, in appropriate circumstances, will intervene quickly to preserve the status quo.

The Legal Framework Governing Powers of Attorney in B.C.

Powers of attorney in British Columbia are governed primarily by the Power of Attorney Act. An enduring power of attorney remains effective even after the adult becomes incapable, making it a powerful planning tool and a frequent source of litigation once capacity is lost.

Attorneys under a power of attorney owe statutory and common law fiduciary duties. These include duties to act honestly, avoid conflicts of interest, keep assets separate, maintain proper records, and exercise the authority granted only for the benefit of the adult. Breach of these duties can give rise to court proceedings seeking remedies such as removal of the attorney, an accounting, restitution, or damages.

When asset dissipation is suspected, however, these remedies may not be sufficient on their own. Interim relief aimed at preserving assets becomes necessary.

What Does “Freezing Assets” Mean in Estate Litigation?

Freezing assets refers to court-ordered restrictions that prevent an attorney from transferring, selling, encumbering, or otherwise dealing with specific property or financial assets while litigation is ongoing. These orders do not determine the final outcome of the dispute. Instead, they are intended to preserve assets until the court can fully adjudicate the issues.

In the context of power of attorney litigation, asset-freezing measures may include restraining orders that prevent withdrawals from bank accounts, injunctions that prohibit the sale or refinancing of real property, or orders that require assets to remain untouched pending further court direction.

These remedies are considered extraordinary because they interfere with a person’s legal authority to manage property. As a result, courts require compelling evidence before granting them.

When Will Courts Freeze Assets in a Power of Attorney Dispute?

Courts approach asset-freezing applications with caution. The applicant must demonstrate more than suspicion or family disagreement. The court must be satisfied that there is a real risk of harm if assets are not immediately preserved.

Courts generally consider whether there is a serious question to be tried regarding misuse of the power of attorney, whether irreparable harm will occur if assets are not frozen, and whether the balance of convenience favours granting the order. This analysis mirrors the test for injunctive relief more broadly, but is applied with sensitivity to the unique fiduciary context of powers of attorney.

Evidence of past unauthorized transactions, failure to provide records, inconsistent explanations for asset transfers, or conduct suggesting an intention to defeat potential claims may all support an asset-freezing application. Urgency is often a decisive factor, particularly when assets are being actively depleted.

Interim Injunctions and Preservation Orders

The most common mechanism for freezing assets in power of attorney litigation is an interim injunction. An injunction restrains the attorney from taking specified actions, such as withdrawing funds, transferring assets, or disposing of property.

Injunctions can be narrowly tailored to specific assets or broader in scope, depending on the circumstances. Courts often seek to strike a balance between preserving assets and allowing legitimate expenses to continue, such as care costs for the incapable adult.

Preservation orders serve a similar purpose but are focused on maintaining the existence and condition of property. For example, a preservation order may prohibit the sale of a home or require that sale proceeds be held in trust pending further court order.

Mareva Injunctions in Power of Attorney Litigation

In dire cases, courts may grant a Mareva injunction, which freezes assets more comprehensively and can extend to assets held by third parties. Mareva injunctions are typically sought where there is evidence that assets may be moved out of the jurisdiction or concealed.

Due to their broad scope, Mareva injunctions necessitate a robust evidentiary foundation. The applicant must show a strong prima facie case, a real risk of asset dissipation, and that the order is necessary to prevent injustice. In power of attorney disputes involving large estates or cross-border assets, Mareva injunctions may be an essential tool.

Freezing Bank Accounts and Investment Assets

Bank accounts are often the first focus of asset-freezing applications in power of attorney litigation. Courts may order financial institutions to restrict transactions on specific accounts or require that withdrawals be limited to defined purposes.

Investment portfolios may also be subject to restrictions, particularly where liquidation appears unnecessary or contrary to the grantor’s best interests. Courts may require assets to remain invested or mandate that transactions receive prior court approval.

Financial institutions served with court orders are typically cooperative, but precise drafting is essential to ensure enforceability and avoid unintended disruption to legitimate financial needs.

Freezing Real Property and Preventing Unauthorized Sales

Real property often represents a significant portion of an adult’s estate and is a frequent target in power of attorney disputes. Attorneys may attempt to sell, transfer, or mortgage property without proper authority or justification.

Courts can restrain dealings with real property by registering a certificate of pending litigation (CPL) against title or issuing injunctions prohibiting transactions. These measures effectively prevent the sale or refinancing of the property until the dispute is resolved or the court grants permission.

In cases where property has already been listed for sale or negotiations are underway, swift court intervention may be critical to preventing irreversible transactions.

Ex Parte Applications and Emergency Relief

In urgent situations, applicants may seek asset-freezing orders without notice to the attorney. These ex parte (without notice) applications are permitted only where giving notice would likely result in asset dissipation or defeat the purpose of the application.

Courts scrutinize ex parte applications carefully and require full and frank disclosure of all relevant facts, including those that may be unfavourable to the applicant. Any failure to disclose material information can result in the order being set aside and costs consequences.

Emergency relief is often time-limited, with follow-up hearings scheduled to allow the attorney to respond. Applicants must be prepared to proceed promptly and responsibly.

Required Evidence in Asset-Freezing Applications

Strong evidence is essential in any application to freeze assets. Courts expect more than generalized concerns or family disputes. Financial records, bank statements, property documents, correspondence, and expert opinions can all play a critical role.

Affidavit evidence should clearly explain the nature of the power of attorney, the alleged misconduct, the assets at risk, and the urgency of intervention. Where capacity issues are involved, medical evidence may also be relevant to establishing vulnerability.

Given the high stakes and procedural complexity, careful preparation is essential.

Interaction With Court-Ordered Accounts and Removal Applications

Asset-freezing remedies often accompany or precede other litigation steps, such as applications for a passing of accounts or removal of the attorney. Freezing assets can preserve the estate while these broader issues are addressed.

In some cases, courts may order an interim freeze while an accounting is conducted, allowing the court to assess the scope of potential misuse. In others, asset preservation may be necessary pending the appointment of a committee under the Patients Property Act.

These remedies are not mutually exclusive and are often part of a coordinated litigation strategy.

Balancing Protection With Fairness

While asset-freezing orders serve an important protective function, courts are mindful of their intrusive nature. Attorneys under a power of attorney are presumed to be acting lawfully unless proven otherwise. Freezing assets prematurely can cause hardship, disrupt care arrangements, or unfairly stigmatize individuals.

As a result, courts strive to tailor orders narrowly and revisit them as circumstances evolve. Applicants must be prepared to justify the scope and duration of any restrictions imposed upon them.

Protecting Vulnerable Adults Through Court Intervention

Power of attorney litigation often arises at moments of vulnerability, when an individual is no longer able to protect their own interests. Asset-freezing remedies play a critical role in preventing exploitation and preserving dignity during these periods.

B.C. courts have demonstrated a willingness to intervene decisively where evidence supports a real risk of harm. Understanding when and how to seek these remedies can make a profound difference in the outcome of a dispute.

Contact Meridian Law Group in Vancouver for Leading Advice in Power of Attorney Disputes

If you are concerned that an attorney under a power of attorney may be misusing or dissipating assets, early legal intervention can be critical. Court-ordered remedies may be available to preserve property and protect vulnerable adults before irreversible harm occurs. At Meridian Law Group, our estate litigation lawyers can assess the situation, advise on urgent relief options, and help you take timely steps to safeguard the vulnerable person’s assets. To book a confidential consultation, please contact us online or call (604) 687-2277.