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A New Protective Regime for an Aging Society?

If you have a child or spouse, you may be surprised to learn that you have no automatic right to manage their property should they become incapable and unable to make decisions unaided. Capable adults in Ontario can make a continuing power of attorney for property to allow one or more persons to make financial decisions for them if they become unable to make such decisions for themselves. However, if your spouse or child did not make a continuing power of attorney for property before becoming incapable (or if your child was never able to make one), then you will most likely have to apply to Court to be appointed your family member's guardian of property in order to manage their property.

The Court guardianship application process can be onerous, time-consuming and expensive, depending on your family member's circumstances and assets. Unfortunately, the onerous nature of your responsibilities will not end with the appointment; one requirement of the appointment will almost always be that you pass your accounts in Court periodically, e.g. every 3 or so years, adding to your burden and your family member's expenses. Requirements regarding record-keeping and restrictions on the decisions you can make and the way you can spend your family member's funds are the same for guardians and attorneys (see our "Stepping Into an Incapable Person's Shoes" blog post from June 2014), but can seem more onerous for guardians given the level of oversight by the Court and the Public Guardian and Trustee.

Adding to any burden in such situations is the question of how you determine if your family member is no longer capable of making decisions regarding their property, and when you should take steps to confirm incapacity. If there is a dispute in the family regarding whether or not your family member is no longer capable of managing their property, which can be the case for example where they can still make some decisions (such as paying household bills) but can no longer make others (such as overseeing a business), the negative repercussions and impact on the family, not to mention the expense of litigating such disputes, can be multiplied exponentially.

These situations highlight the challenges and shortcomings of our current test for determining when a person is not able to manage their property and our current regime for how decisions are made on behalf of the person after it is determined that they are unable to do so. The Law Commission of Ontario issued a consultation paper in June, 2014 titled Legal Capacity, Decision-Making and Guardianship, which explores some of the shortcomings in our current system and suggests some potential ways to remediate or minimize them. Areas of challenge which are highlighted in the paper are the test for legal capacity, the substitute decision-making model, and access to the law. Public consultations were held last year following the release of the paper, and the Law Commission of Ontario expects to release an interim report this year.

One suggestion made in the Law Commission of Ontario paper is to replace the current model of substituted decision-making with supportive or co-decision-making, to allow the incapable person to have as much input as reasonably possible into the decisions which are made regarding their property. Whether or not you are in favour of such a change, this proposal does highlight the need to appreciate that incapable people are still the owners of their property while it is being managed by others; it does not belong to their loved-ones or heirs, and it should be used to protect them and for their best interests only. A person who has lost their capacity should not lose their dignity too.

Having to assume control over a family member's property is a difficult and sometimes painful and expensive process, all the more so if a family dispute develops due to the person's incapacity or suspected or potential incapacity. As our society ages, these disputes are becoming more common, just as are reports of elder abuse, including financial abuse. Maybe it is time for a more sophisticated protective regime for vulnerable persons, which takes account of their wishes and desires in a more responsive and nuanced way and seeks to enable good decision-making, not to simply take it away.

- Susannah B. Roth

Don't miss our next blog post which examines the importance of updating your estate planning after a divorce or separation.

The comments offered in this article are meant to be general in nature, are limited to the law of Ontario, Canada, and are not intended to provide legal advice on any individual situation. Before taking any action involving your individual situation, you should seek legal advice to ensure it is appropriate to your personal circumstances.

 

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