My family had a similar experience in Ontario.
My mother was diagnosed as having senile dementia.  My sister, who had power of attorney for my mother, had passed away before that diagnosis. One of my brothers, who was under the impression that he had been designated as an alternate power of attorney, was unable to find any paperwork to that effect. Other family members were willing to have that brother handle my mother's affairs. The Ontario agency responsible for the finances of people incapable of handling their own affairs seized control of my mother’s substantial finances nonetheless. To add injury to insult they sold her investments near the bottom of the market during the 2008 financial crisis. 
My brother investigated suing the government agency but was told by his lawyer that such a suit was not likely to be successful.