Ontario does not have a process to establish a legal representative specifically for RDSP beneficiaries. The Substitute Decisions Act, 1992 governs the establishment of general substitute decision-makers for property management, including through the execution of a POA or the appointment of a guardian. The SDA was enacted in 1992 following a robust law reform process involving commissioned expert reports and extensive consultations with stakeholders, who played a substantial role in framing much of the legislation that was eventually adopted. It incorporates a sophisticated cognitive approach with standards that are tailored to personal and external appointments, and that are divided between property management and personal care. A person is entitled to rely on the presumption that an adult is capable unless he or she “has reasonable grounds to believe that the other person is incapable of entering into the contract…” The threshold for capacity to give a POA for personal care is at the low end and that for the incapacity to manage property is at the high end. This demonstrates a flexible understanding of capacity as specific to the decision being made.
We limit our discussion in this section to a summary of the SDA provisions that could be used to establish a legal representative for RDSP beneficiaries, although they are intended for broader application. The LCO will also review stakeholder reports that accessing the RDSP through these avenues has had negative repercussions for RDSP beneficiaries as well as their goals for reform. Further details on how Ontario’s current framework addresses key issues raised by stakeholders are provided under corresponding sections in Chapter V, for instance the eligibility of legal representatives and safeguards against abuse.
B. Property Management under the Substitute Decisions Act, 1992
1. The Personal Appointment Process: Continuing Powers of Attorney
An adult can execute a POA to authorize a person to “do on the grantor’s behalf anything in respect of property that the grantor could do if capable, except make a will”. Authority over property management under the SDA includes “any type of financial decision or transaction that a person would make in the course of managing his or her income, spending, assets, and debts. For example, it could include budgeting expenses and paying bills, doing tax returns, safeguarding valuables, selling real estate, or making loans”. Opening an RDSP, deciding plan terms and managing funds once they have been paid to an RDSP beneficiary clearly fall within this broad scope of authority. An adult can, however, limit an attorney’s authority by setting out specific areas for substitute decision-making, instructions, conditions and restrictions. As will be seen in Chapter V, at least one Canadian province has recommended the use of a “special limited” POA for RDSP beneficiaries wishing to designate a plan holder.
A POA takes effect immediately or upon the occurrence of a specified event and, if it is a continuing or enduring POA, it will continue to be effective during the adult’s incapacity to manage property. Indeed, the event that triggers a so-called springing POA could be a finding of incapacity that is determined according to a method provided for in the POA. The default method to determine incapacity for the commencement of a springing POA is a capacity assessment, described in Section 3 below. This is a flexible requirement: if the adult specifies that another person assess his or her incapacity, “such as a family member or friend, that other method of assessment would need to be followed”.
The threshold for capacity to execute a POA for property is low relative to the test for incapacity to manage property, and “a continuing power of attorney is valid if the grantor, at the time of executing it, is capable of giving it, even if he or she is incapable of managing property”. However, the definition of capacity to give a POA in Ontario is more rigorous than in many other Canadian provinces, being premised on a highly detailed cognitive approach. It requires that an adult,
a) knows what kind of property he or she has and its approximate value;
b) is aware of obligations owed to his or her dependents;
c) knows that the attorney will be able to do on the person’s behalf anything in respect of property that the person could do if capable, except make a will, subject to the conditions and restrictions set out in the power of attorney;
d) knows that the attorney must account for his or her dealings with the person’s property;
e) knows that he or she may, if capable, revoke the continuing power of attorney;
f) appreciates that unless the attorney manages the property prudently its value may decline; and
g) appreciates the possibility that the attorney could misuse the authority given to him or her.
The threshold for capacity to give a POA for personal care does not apply to RDSP decision-making. However, the threshold for capacity to give a POA for personal care is illustrative of the relative stringency of the threshold for property management. It only requires an adult,
a) has the ability to understand whether the proposed attorney has a genuine concern for the person’s welfare; and
b) appreciates that the person may need to have the proposed attorney make decisions for the person.
An adult can appoint one or more persons as attorneys. If more than one person is appointed, the attorneys must make decisions jointly unless the POA says that their responsibilities should be separated. Giving attorneys the opportunity to make decisions separately guards against interruptions in representation that can be expected from temporary absences, such as sickness or vacations, or for unexpected reasons. A substitute attorney can also be named to avoid an adult being “left with no one to manage [his or her] financial affairs” if the primary attorneys are unavailable. Having multiple attorneys, or a substitute, can also safeguard against the POA being automatically terminated where an attorney dies, becomes incapable of managing property or resigns. Moreover, adults can execute multiple POAs to cover different areas of decision-making or to come into effect upon the termination of another POA.
If a POA is not a continuing POA, it is terminated when the adult becomes incapable. A continuing POA is terminated in various situations, as where there are no longer attorneys under the POA who are available and willing to act, a capable adult revokes the POA or the court appoints a guardian of property through the avenues described below.
2. Court Ordered Guardianship
Guardianship is an avenue of last resort that is generally reserved for circumstances where adults’ informal supports cannot meet their needs for assistance and they do not have, or are not capable of granting, a POA. Any person can apply to the Superior Court of Justice to appoint one or more guardians for an adult who a judge finds incapable of managing property. The judge can dispose of the application with a hearing or through summary disposition. An application for summary disposition must be accompanied by documents including an assessment that the adult is incapable of property management. The summary disposition of guardianship applications is considered more comprehensively in Chapter V.B.3 of this discussion paper.
An adult is incapable if she or he is “not able to understand information that is relevant to making a decision in the management of his or her property, or is not able to appreciate the reasonably foreseeable consequences of a decision or lack of decision”. The test for incapacity, thus, adopts a cognitive approach that includes “factually grasp[ing] and retaining information”, realistically appraising outcomes, and justifying and communicating choices.
Ontario has limited guardianship to a measure of last resort that can be ordered for an adult only where “it is necessary for decisions to be made on his or her behalf….” One purpose of guardianship is to protect adults who “are unable to look after their own welfare by attending to the basic financial transactions that adults normally carry out for themselves”. Should an “alternative course of action” meet an adult’s decision-making needs in a manner that does not require a finding of incapacity and “is less restrictive of the person’s decision-making rights”, the court is prohibited from appointing a guardian.