Today on Hull on Estates, Suzana Popovic-Montag and Umair Abdul Qadir discuss the recent decision of the Honourable Justice McNamara in Shaw v Barber, 2017 ONSC 2155, regarding the tolling of the limitation period for dependant’s relief claims under Part V of the Succession Law Reform Act when the Office of the Public Guardian and Trustee is acting as the statutory guardian for an incapable person.
Today’s blog was inspired by Karen Von Hahn’s article in The Globe and Mail about the memoir that she wrote on the subject of her late mother. What Remains: Object Lessons of Love and Loss appears to be a collection of chapters in which each chapter is focused on a different thing or object that reminded the author of her mother. According to Von Hahn, she used items, like her mother’s silver satin sofas and a pack of cigarettes, “as a starting point, lens and metaphor to talk about who she was”. Perhaps poignantly, Von Hahn wrote that “the first line of the book is that the last word my mother ever said to me was ‘pearls’”.
Given the importance that we may attach to our things (and the importance that our loved ones may correlatively attach to our things), those who are thinking about their estate plans may wish to include specific provisions in their Will with respect to the disposition of personal possessions on death.
In doing so, an attorney for property or a guardian of property will also be prohibited from getting rid of these specific items during the testator’s lifetime, if he/she knows that these items are subject to a specific testamentary gift in accordance with section 35.1 of the Substitute Decisions Act, 1992. That being said, section 35.1 of the Act also allows for the disposition of a specific testamentary gift if it is necessary to comply with the guardian’s duties, or if it is gifted to the person who would be entitled to it under the Will within the purview of an optional expenditure under section 37. Accordingly, specificity is key in this regard and it would appear that care should be given to describing the item with as many details as possible.
As Von Hahn wrote in her article,
“Like it or not, we read every book by its cover, and judge everyone we meet by their shoes. Which is why we live our lives engaged in a deep and meaningful relationship with both our possessions, and also those of whom we love.”
On that note, happy long weekend everyone!
Canada’s model legislation regarding digital assets, the Uniform Access to Digital Assets by Fiduciaries Act (the “Canadian Model Act”), was introduced in August 2016, and borrows heavily from its American predecessor, the Revised Uniform Fiduciary Access to Digital Assets Act (the “American Model Act”).
The Canadian Model Act defines a “digital asset” as “a record that is created, recorded, transmitted or stored in digital or other intangible form by electronic, magnetic or optical means or by any other similar means.” As with the definition appearing within the American Model Act, this definition does not include title to an underlying asset, such as securities as digital assets. Unlike the American Model Act, the Canadian Model Act does not define the terms “information” or “record.”
In the Canadian Model Act, the term “fiduciary” is also defined similarly as in the American Model Act, restricting the application of both pieces of model legislation to four kinds of fiduciary: personal representatives, guardians, attorneys appointed under a Power of Attorney for Property, and trustees appointed to hold a digital asset in trust.
One challenge that both pieces of model legislation attempt to address is the delicate balance between the competing rights to access and privacy. The American Model Act is somewhat longer in this regard, as it addresses provisions of American privacy legislation to which there is no equivalent in Canada. Canadian law does not treat fiduciary access to digital assets as a “disclosure” of personal information. Accordingly, under Canadian law, the impact on privacy legislation by fiduciary access to digital assets is relatively limited.
The Canadian Model Act provides a more robust right of access to fiduciaries. Unlike the American Model Act, the Canadian Model Act does not authorize custodians of digital assets to choose the fiduciary’s level of access to the digital asset. Section 3 of the Canadian Model Act states that a fiduciary’s right of access is subject instead to the terms of the instrument appointing the fiduciary, being the Power of Attorney for Property, Last Will and Testament, or Court Order.
Unlike the American Model Act, the Canadian equivalent has a “last-in-time” priority system. The most recent instruction concerning the fiduciary’s right to access a digital asset takes priority over any earlier instrument. For example, an account holder with a pre-existing Last Will and Testament, who chooses to appoint a Facebook legacy contact is restricting their executor’s right to access their Facebook account after death pursuant to the Will.
Despite their differences, both pieces of model legislation serve the same purpose of facilitating access by attorneys for or guardians of property and estate trustees to digital assets and information held by individuals who are incapable or deceased and represent steps in the right direction in terms of updating estate and incapacity law to reflect the prevalence of digital assets in the modern world.
Thank you for reading,
This week on Hull on Estates, Paul Trudelle and Noah Weisberg discuss the Law Commission of Ontario’s Final Report on legal capacity, decision-making and guardianship in Ontario.
Last week, the Law Commission of Ontario (LCO) released its Final Report on Legal Capacity, Decision-making and Guardianship. The Final Report is the result of work conducted by a LCO Advisory Group since early 2013.
In the Final Report, the LCO outlines the strengths and attributes of Ontario’s capacity and guardianship regime, as well as areas of concern. Some key areas of concern the LCO identifies include:
- The system is confusing and lacks coordination;
- There is a lack of clarity and consistency in the law for capacity assessments;
- Legal tools are not responsive enough for the range of needs of those directly affected;
- Individuals, families, and service providers are not receiving enough support;
- The current oversight and monitoring mechanisms for substitute decision makers are insufficient;
- The dispute resolution mechanisms under the Substitute Decisions Act, 1992 (SDA) are inaccessible to many.
The Final Report includes recommendations for reforms to law, policy and practice. These recommendations relate to (1) improving access to the law, (2) promoting understanding of the law by those directly affected, (3) strengthening protection of rights under the Health Care Consent Act, (4) reducing inappropriate intervention, (5) increasing accountability and transparency, and (6) enabling greater choice of substitute decision makers.
The Final Report makes 58 recommendations on the statutory regime for legal capacity, decision-making, and guardianship, including proposed reforms to the SDA, the Health Care Consent Act, 1996, and the Mental Health Act. Some of the Final Report’s key recommendations on the law of substitute decision-making include:
- Improved access to capacity assessments under the SDA;
- A standard-form “Statement of Commitment” required to be signed by persons accepting an appointment as an attorney;
- The delivery of “Notices of Attorney Acting” at the first time the attorney acts, delivered to the grantor, the spouse, any previous attorney and any monitor appointed, as well as for any other persons identified in the Power of Attorney;
- The option to name a “monitor”, who would have statutory powers to visit and communicate with the grantor and powers to review accounts and records kept by the attorney;
- Development of time-limited or reviewable guardianship orders;
- Development of limited property guardianships, in parallel with existing limited personal care guardianships;
- Further research and consultation be conducted towards establishing a dedicated licensing and regulatory system for professional substitute decision-makers;
- Further research and consultation be conducted towards allowing community agencies to provide substitute decision-making for day-to-day decisions;
- Clarification of the duty of health practitioners to provide information to substitute decision-makers upon a finding of incapacity; and
- Empowering adjudicators under the SDA to order substitute decision-makers to obtain education on specific aspects of his or her duties.
The Final Report suggests short, medium, and long-term plans for implementing the LCO’s recommendations. You can find a copy of the full report at the LCO website.
Thank you for reading.
Other articles you might enjoy:
“Disability” is defined in Rule 1.03(1) to mean a person who is (a) a minor, (b) mentally incapable within the meaning of section 6 or section 45 of the Substitute Decisions Act, 1992, whether that person has a guardian or not, or (c) an Absentee within the meaning of the Absentee Act.
The procedure and requirements for the appointment of a Litigation Guardian are different for plaintiffs/applicants and defendants/respondents.
The initial appointment of a Litigation Guardian for a plaintiff or applicant occurs without a court order upon the filing of an affidavit with the court setting out the information outlined in Rule 7.02(2).
Where the party under a disability is a defendant or respondent to a proceeding, Rule 7.03(1) states that a Litigation Guardian must be appointed by motion to the court unless the exceptions set out in Rule 7.03 (2), (2.1) or (3) apply. These exceptions include the prior appointment of a Guardian or a valid Attorney for Property with express powers to act as Litigation Guardian, or where the Office of the Children’s Lawyer is representing a minor’s interest in an estate or trust. Where there is no appointed guardian or attorney under a power of attorney, any person not under a disability may act as a Litigation Guardian. Where there is no person willing to act as Litigation Guardian, the Public Guardian and Trustee may be appointed.
Litigation Guardians are necessary to protect parties under disability, but also to protect opposing parties and court procedures.
A recent decision of the Ontario Superior Court of Justice, Huang v. Braga, 2016 ONSC 6306, considers the appointment of a litigation guardian for a defendant or respondent in circumstances of mental incapacity.
In that case, the defendant had retained five different counsel over 13 years. She had fired her counsel, rejected a large settlement and insisted on proceeding to trial. A capacity assessment was ordered and she was found to be incapable of acting for herself in the action, but capable of managing her property. On review of the totality of the circumstances, Archibald J. found the defendant to be a party under a disability and issued Judgment appointing the Public Guardian and Trustee to act as litigation guardian.
Archibald J. refers to the decision in C.C. v. Children’s Aids Society of Toronto,  OJ No. 5613, which establishes the following test for whether a Litigation Guardian is required:
- The person must appear to be mentally incapable with respect to an issue in the case; and
- As a result of being mentally incapable, the person requires legal representation to be appointed by the Court.
In addition, Archibald J. states that the cause of incapacity must stem from a source of mental incapacity such as mental illness, dementia, developmental delay or physical injury and not from some other reason such as lack of sophistication, education or cultural differences.
Archibald J. states that in determining whether a person “appears to be mentally incapable” the following factors should be considered:
(a) The person’s ability to know or understand the minimum choices or decisions required and to make them;
(b) An appreciation of the consequences and effects of his or her choices or decisions;
(c) An appreciation of the nature of the proceedings;
(d) The person’s inability to choose and keep counsel;
(e) The person’s inability to represent him or herself;
(f) The person’s inability to distinguish between relevant and irrelevant issues; and,
(g) The person’s mistaken beliefs regarding the law or court procedures.
Traditionally the Court has accepted the following types of evidence in support of same:
- medical or psychological evidence as to capacity (including, a capacity assessment, report or doctors certificate);
- evidence from persons who know the litigant well;
- appearance and demeanour of the litigant;
- testimony of the litigant; and,
- opinion of the litigant’s own counsel.
Thank you for reading.
There are a number of limited grants that are important to consider for succession planning purposes. We have previously blogged about a type of limited grant, a durante minore aetate, which grants administration duties to a guardian if a minor is named as executor of an estate. Other types of limited grants include administration durante absentia and grants to attorneys, both of which deal with administrators located outside of the jurisdiction.
A grant of administration durante absentia is a grant necessary where the person entitled to a certificate of appointment is absent from the jurisdiction. The grant will be effective until the entitled individual returns to the jurisdiction. Today, these grants are made by passing over the absent individual and by appointing a person who the court sees as appropriate in the circumstances. The grant may last for longer than the named individual’s absence from jurisdiction.
A grant of administration durante absentia is usually made by the next of kin pursuant to section 13 of the Estates Act which states:
- Where application is made for letters of administration by a person not entitled to the same as next of kin of the deceased, an order shall be made requiring the next of kin, or others having or pretending interest in the property of the deceased, resident in Ontario, to show cause why the administration should not be granted to the person applying therefor; and if neither the next of kin nor any person of the kindred of the deceased resides in Ontario, a copy of the order shall be served or published in the manner prescribed by the rules of court.
This provision is further governed by Section 14 of the Estates Act which states:
- (1) If the next of kin, usually residing in Ontario and regularly entitled to administer, is absent from Ontario, the court having jurisdiction may grant a temporary administration to the applicant, or to such other person as the court thinks fit, for a limited time, or subject to be revoked upon the return of such next of kin to Ontario
(2) The administrator so appointed shall give such security as the court may direct, and has all the rights and powers of a general administrator, and is subject to the immediate control of the court. R.S.O. 1990, c. E.21, s. 14 (2).
Furthermore, a grant to an attorney may be made if the person solely entitled to a grant as estate trustee with or without a will is out of the jurisdiction. Pursuant to section 5 of the Estates Act, letters of administration, except by resealing, can be granted only to a resident of Ontario. However, the case of Armstrong Estate, Re, 2010 ONSC 2275, held that if a non-resident is applying for a Certificate of Appointment of Estate Trustee with a Will, and the applicant has the consent of a majority of the persons resident in Ontario who are otherwise entitled to apply, and where security is in place, the grant may be issued to the non-resident.
Thank you for reading,
When dealing with the administration of an estate, there is the possibility that a bequest will be left to a minor, resulting in the need for it to be held in trust until the minor reaches the age of majority. It is also possible to have a situation where the executor named in a will is a minor at the date of death of the testator, pursuant to section 26 of the Estates Act. This will result in a Certificate of Appointment of Estate Trustee being issued to the guardian of the named executor, until he or she turns 18. The guardian acting as executor is called durante minore aetate, which translates to “during the minority”.
Pursuant to section 26 of the Estates Act:
(1) Where a minor is sole executor, administration with the will annexed shall be granted to the guardian of the minor or to such other person as the court thinks fit, until the minor has attained the full age of eighteen years, at which time, and not before, probate of the will may be granted to the minor
(2) The person to whom such administration is granted has the same powers as an administrator has by virtue of an administration granted to an administrator during minority of the next of kin.
The powers of durante minore aetate to act in the place of a minor are not limited. As per Re Cope, (1880), 16 Ch. D. 49 (Eng Ch Div) at 52:
The limit to his administration is no doubt the minority of the person, but there is no other limit. He is an ordinary administrator: he is appointed for the very purpose of getting in the estate, paying the debts, and selling the estate in the usual way; and the property vests in him.
In Monsell v Armstrong, (1872) LR 14 Eq 423 at 426, the court held there is “no distinction between a common administrator durante minore aetate as regards the exercise of a power of sale.” Along with the power of sale, it seems too that an administrator for the use and benefit of a minor may also assent to a legacy and may be sued for the debts of the deceased.
An application for a certificate of appointment for the use and benefit of a minor should be in Form 74.4, 74.4.1, 74.5, or 74.5.1 (forms can be found here) and should include an explanation stating that the executor named in the will is not the applicant due to the minority of the named executor. Once the application is filed, the matter will be referred to a judge. If the judge orders a certificate of appointment of estate trustee with a will, it will include the phrase “Right of (name of minor executor) to be appointed estate trustee on attaining 18 years of age is reserved.”
Thanks for reading,
A property guardian of an incapable adult may be required by a court to post security “in the manner and amount that it considers appropriate”: see section 25 of the Substitute Decisions Act (the “SDA”). This discretion impressed upon a court can result in a wide variation in outcomes depending on the facts of the case under consideration.
Guardians residing outside of Ontario appear to have a higher hurdle to jump in order to avoid having to post a bond, given the requirement in section 24 of the SDA that a person residing outside of the province “shall not be appointed as a guardian of property unless the person provides security, in a manner approved by the court, for the value of the property”. That said, the legislation goes on to allow the court to dispense with the requirement or reduce the amount required to be posted, and make its order subject to conditions. In so doing, the court is to consider the best interests of the incapable person. The size and complexity of the assets under guardianship will likely play a factor in the court’s decision. If there is more than one guardian and one of them resides in Ontario, this could be a particularly helpful reason to excuse the requirement to post a bond.
There is considerably less leeway when it comes to property guardianships over minors, with section 55 of the Children’s Law Reform Act (the “CLRA”) requiring a bond to be posted and payable to the child “in such amount as the court considers appropriate in respect of the care and management of the property of the child”, save and except where the guardian is the child’s parent and the court holds the opinion that the parent not be required to post a bond. Accordingly, if you are not the child’s parent the posting of a bond is mandatory.
With the court’s duty being to ensure that the incapable person and/or child and his/her property is protected, we can expect a fairly cautious approach being taken by judges considering requests to dispense with the bond requirement in guardianship situations, particularly in guardianships of minors.
Thanks for reading,
Our population is aging but living longer. This has resulted in an increase in the prevalence of dementia and other aging-related conditions associated with cognitive decline, and a corresponding increase in the use and activation of powers of attorney.
As estate litigators, our firm is beginning to see a rise in power of attorney disputes between siblings and other family members. These types of disputes are often emotionally fuelled by longstanding sibling rivalry or distrust among family members, and can result protracted litigation and expensive legal bills.
Often a sibling or other family member will have concerns that the appointed attorney is acting improperly or is failing to fulfill his or her duties. In these circumstances, the sibling or family member may have concerns with respect to a lack of transparency or feel that they are being left out of the decision-making process.
It is useful for these individuals to know that the Substitute Decisions Act, 1992 (the “SDA”) imposes certain obligations upon an attorney, which may assist in addressing these concerns.
The SDA states that an attorney has a duty to consult with family members and keep them informed as to the incapable person’s health and wellbeing (ss. 32(5)) and that an attorney has a duty to foster personal contact between the incapable and his or her supportive family members (ss. 32(4)).
The SDA also states that an attorney has a duty to keep proper records and to provide updates regarding the incapable person’s financial circumstances (ss. 32(6)).
The SDA also states that an appointed attorney must also obtain and review a copy of the incapable person’s Will (s. 33.1). If the Will provides that a specific item of property is to be given to a particular beneficiary, the attorney must retain that property for that beneficiary unless it is essential to sell the item in order to satisfy the incapable person’s legal responsibilities or otherwise provide for the incapable person (ss. 35.1(1)).
These duties are ongoing and an attorney can generally be held personally liable for any damages that results from a breach of his or her duties.
The Office of the Public Guardian and Trustee has published a brochure that outlines the duties and powers of an appointed attorney for property in greater detail, which can be viewed here.
Communication is often the key to resolving these types of disputes between family members. However, where there is a breakdown in communication, the assistance of a litigator or mediator who specializes in this practice area is often helpful.
Thank you for reading.