A.    A Simpler Process for Adults to Name an RDSP Legal Representative

 The LCO’s recommendations are about what changes would be needed to create a simpler process to name a plan holder in Ontario, called an RDSP legal representative.

We recommend that adults be allowed to name a family member, friend or community organization as their RDSP legal representative. This would give adults the autonomy to choose whom they would like to represent them for the RDSP in a document that is like a power of attorney. It could be done at home or with the help of someone else, such as a lawyer.

We also recommend changes that would be needed to make a simpler process work.

It is important to know that the LCO’s recommendations take into account our larger project on Legal Capacity, Decision-Making and Guardianship.

There are certain issues that came up in the RDSP project that the larger project will decide. We tried not to decide issues in the RDSP project that could limit the options for change that we are reviewing in the larger project.

*You can see the full list of our ten recommendations in the Final Report, Chapter V, “List of Recommendations”.

*The LCO’s discussion paper in the larger Legal Capacity, Decision-Making and Guardianship project is available online here:


     1.   When Can the Simpler Process Be Used?

The simpler process that we recommend is meant for situations where there are concerns about an adult’s capacity to be a plan holder and the adult does not have a guardian or attorney.  

Capacity to be a plan holder means being able to understand facts about the RDSP and the consequences of making (or not making) decisions about the RDSP. Adults themselves might believe that they do not have capacity to be a plan holder. A financial institution employee, such as a bank advisor, might also believe that an adult does not have capacity and refuse to open an RDSP, unless there is another legally authorized person in place. In these situations, adults could use the simpler process to name an RDSP legal representative.

The simpler process to name an RDSP legal representative is meant for situations where

  • there are concerns about an adult’s capacity to be a plan holder and
  • the adult does not have a guardian or attorney. 

  2.  Who Can Use the Simpler Process?

Similar to what is needed to make a power of attorney, adults who are able to meet a legal test for capacity could name an RDSP legal representative under the simpler process.

Because we heard that the test to make a power of attorney has been too difficult for some adults with disability to name a plan holder, we recommend an easier test.

In the Final Report, we discuss two tests: the common law test and the British Columbia test under the Representation Agreement Act.[18] Our preference is for a test that is based on the common law. But if the Ontario government wants an even more flexible test, it could choose the test from British Columbia.

The Common Law Test

 The common law is a type of law that comes from court decisions. There are tests for capacity under the common law that are already used in Ontario for certain decisions. The common law was also the original source for the tests in the Substitute Decisions Act, 1992.

The common law test requires that adults have the ability to understand facts about naming an RDSP legal representative and the possible consequences.

A test used in Saskatchewan that is similar to the common law test has been described as setting a low requirement. For instance, in that province, adults just need to understand that they are naming a parent or other person to set up a savings account.[19] The common law test can also be changed in different ways to make it more flexible.

The British Columbia Representation Agreement Act Test

 The British Columbia test for capacity under the Representation Agreement Act is the most flexible test in Canada. It is very different from tests that are used in Ontario.  

The LCO heard that the factors listed in this test can be confusing and create risks of financial abuse. Therefore, we recommend that the Ontario government choose the British Columbia test only if it thinks that the common law test is not flexible enough for beneficiaries to use.

The British Columbia test has four factors. The full test is found in Appendix A of this summary. The factors include the communication of a desire to have a representative and the existence of a trusting relationship with the representative.[20]

*For more information on who we recommend should be able to use the simpler process, see the Final Report at pages 33 to 38.

*We explain the tests for capacity under the common law and the British Columbia Representation Agreement Act in the Final Report, Chapter IV.C.3, “Capacity Criteria to Grant a Personal Appointment”.

  3.  What if Adults Disagree with an Opinion about their Capacity to Be a Plan Holder?

 If an adult disagrees with a financial institution employee’s opinion that he or she is incapable of being a plan holder, the adult could ask for a letter of opinion from a “capacity assessor”. A letter of opinion from a capacity assessor that says an adult is capable of being a plan holder for the RDSP might change a financial institution employee’s mind. However, it is not guaranteed that it will change the financial institution employee’s mind.

Capacity assessors are professionals who give capacity assessments for different reasons. Capacity assessors charge fees that are less expensive than going to court. The capacity assessment can take place in the community; for instance, it can take place at the adult’s home.

Adults wishing to disagree with a financial institution employee’s opinion about RDSP decision-making would need to ask for a letter of opinion only about the capacity to be a plan holder for the RDSP.

It would be very important to be clear with the capacity assessor about the purpose of the letter of opinion to prevent a possible finding of incapacity that is not related to the RDSP and that might affect the person’s ability to deal with other types of property.

*For more information, see the Final Report Chapter IV.C.1, “Determining the Beneficiary’s Capacity to Be the Plan Holder”.


B.    Who Can Be an RDSP Legal Representative 

 In our consultations, people said that adults should be able to choose from a wide-range of RDSP legal representatives as long as there are protections from financial abuse.

Normally, adults can name a family member or friend in a power of attorney. In the RDSP project, we recommend that community organizations be added to this list.

There are many adults who may not have a trusted family member or friend to be their RDSP legal representative and who rely on service providers. Some community organizations told the LCO that they already help adults with money, such as ODSP payments, and that they would be willing to be RDSP legal representatives.

Community organizations have different responsibilities than individuals and there is a risk that they may not use their authority properly. Therefore, we say that community organizations should be approved by a government office to be an RDSP legal representative.

If an adult names a community organization, we also recommend that the community organization have special duties, such as keeping separate records of each beneficiary’s RDSP and regularly reviewing these records.

An RDSP legal representative could be a

  • family member,
  • friend, or
  • a community organization that is approved by a government office.

*We recommend two ways that community organizations could be approved by a government office. For more information on these recommendations, see the Final Report, Chapter IV.C.7, “Who May Act as an RDSP Legal Representative”.


C.     The RDSP Legal Representative’s Responsibilities

1.  Opening an RDSP and Making Decision about Money in the RDSP

 The LCO recommends that RDSP legal representatives have authority to do everything that a plan holder can do, including opening an RDSP and making decisions about money in the RDSP.

When RDSP legal representatives make decisions, they should have the same duties as a person named in a power of attorney who makes decisions for an adult who is found to be incapable of managing property. These duties include encouraging the adult’s participation in decision-making, to the best of his or her abilities, and consulting with supportive family members and friends.[21]  

RDSP legal representatives should be required to make decisions about the RDSP that are based on decisions made by the adult about personal care (or another person with legal authority to make decisions about the adult’s personal care). If their decisions will have an effect on the adult’s personal comfort or well-being, they should also consider that effect and determine whether a decision is for the adult’s benefit.[22]

The RDSP legal representatives’ duties need to be performed diligently, with honesty and integrity and in good faith, for the adult’s benefit.[23]

We recommend that RDSP legal representatives have authority to

  • open an RDSP,
  • consent to money being put into the RDSP,
  • make investment choices, and
  • ask for payments to be made to the beneficiary.

2.  What Happens to Money Paid From the RDSP?

 Beneficiaries must begin to get money from an RDSP starting at the age of 60. Their money comes out on scheduled dates in amounts that are set by the federal government. But plan holders can sometimes ask for extra, one-time payments to go to beneficiaries.

Under the Income Tax Act, plan holders can make decisions about money while it is still inside the RDSP at the financial institution. However, plan holders cannot make decisions for beneficiaries about how they spend their money after it comes out of the RDSP.

We recommend that RDSP legal representatives have the same responsibilities and limitations as plan holders. We do not recommend that they have authority to control an adult’s spending money because it could increase opportunities for abuse. We are also concerned that giving RDSP legal representatives more authority would create confusion about their responsibilities.

Adults with legal capacity who get payments from the RDSP can manage their money alone or with support from family and friends, depending on their choice. Otherwise, if an adult is not legally capable of managing his or her payments, the rules in place under the SDA would apply.

As an added protection against financial abuse, we believe that when RDSP legal representatives want to make a special request for a payment to go to the adult, they should first consider whether the adult is legally capable of managing the payment, and then follow certain rules based on their opinion.

Adults who get payments from the RDSP can manage their money alone or with support from family and friends.

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