This week on Hull on Estates, Paul Trudelle and Lisa Haseley discuss Sidney Peters and Citlally Maciel’s paper, “Reclaiming Autonomy: Practical Considerations when Client’s resume Capacity”, which was presented at The Six-Minute Estates Lawyer OBA conference on May 3, 2016.
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Many people will remember the issues which played out very publicly for Britney Spears in 2007. Nine years have passed since these incidents, and, to the outside world, it appears that Britney has turned things around, recently extending her residence in Las Vegas for an additional two years and $35 million. While Britney may have put the worst of these issues behind her, one legal consequence of such a time still has a daily impact upon her life.
In the midst of Britney’s issues playing out in the tabloids, Britney’s father, Jamie Spears, applied for court-appointed conservatorship over Britney’s affairs. Such a conservatorship was ultimately granted, giving Britney’s father complete control over Britney’s financial decision making. As reported in the National Post this week, even though nine years have passed since the initial court Order, such a conservatorship is still in effect. As a result, every aspect of Britney’s financial affairs are governed through her conservatorship, with as mundane of purchases as coffees from Starbucks, and songs from iTunes, being tracked by the court.
In Ontario, the closest equivalent we have to court-appointed conservatorship is court-appointed guardianship, which is governed by Part I of the Substitute Decisions Act. Such an Application may be brought on behalf of a person who “is incapable of managing property”, allowing for an alternate individual to be appointed as their guardian of property, administering their assets in accordance with a court approved “management plan”. As granting guardianship has a major impact upon an individual’s life, removing much of their autonomy, the court only does so when absolutely necessary. Indeed, in accordance with section 22(3) of the Substitute Decisions Act, the court shall not appoint a guardian if it is satisfied that there is an alternative course of action that does not require the court to find the person to be incapable of managing their property, and is less restrictive of the person’s decision-making rights.
In light of Britney’s apparent recovery, a natural question which would follow is whether the conservatorship is still necessary. In Ontario, if it is believed that a guardianship is no longer necessary, a Motion may be brought under section 28 of the Substitute Decisions Act to terminate the guardianship. If the court agrees, and the guardianship is terminated, the individual on whose behalf the guardian was appointed would regain control over their financial affairs and decision making.
A recent decision of the Ontario Superior Court of Justice highlights the real or perceived conflicts of interest that can arise when a guardian for property wears more than one fiduciary hat.
In Taticek v Zeisig, 2016 ONSC 772, Ronald and Peter were appointed as joint guardians for property and personal care for Annemarie in 2012. Annemarie, Ronald and Peter, along with Annemarie’s daughter Sonya, owned a farm property in joint tenancy (the “Farm”). The Honourable Justice Annis had approved the original guardianship order, which included a plan for the management of the Farm.
Ronald and Peter brought an Application to pass their accounts in March 2014, in accordance with Justice Annis’s Order. The Public Guardian and Trustee (“PGT”) objected to the accounts, but subsequently withdrew the objections and initially supported the sale of the Farm.
Ronald passed away on April 23, 2014, with his interest in the Farm passing by right of survivorship to the other joint tenants. The other guardian, Peter, was the sole Estate Trustee for Ronald’s Estate. Peter was also the sole trustee of a family trust (the “Family Trust”), which was settled for the benefit of Ronald’s children.
The Family Trust wanted to purchase Annemarie’s one-third interest in the Farm, and Peter brought an Application to amend the management plan to allow for the joint tenancy in the Farm to be severed. The PGT opposed the Application, and Peter brought a Motion for an Order approving the amended management plan.
On the Motion, Peter argued that he was acting in Annemarie’s best interest, and was not in a conflict of interest because her share of the Farm would be sold at fair market value and the proceeds of sale would be placed in an investment account.
In highlighting deficiencies in the amended management plan, the PGT noted three potential conflicts of interest:
- Peter had to determine whether Annemarie had to reimburse loans from Ronald, and the amended plan lacked details about Peter’s obligations to the Family Trust.
- In determining whether the Farm was to be sold to the Family Trust or to a third party, Peter would potentially continue to personally benefit if the one-third share of the Farm was purchased by the Family Trust.
- Peter’s obligation to maximize the value of Annemarie’s share of the Farm in his capacity as her guardian for property was in conflict with his duty to purchase her share at the lowest possible price on behalf of the Family Trust.
Ultimately, the Honourable Justice Patrick Smith refused to grant Orders dismissing Peter’s Application and appointing the PGT as Annemarie’s guardian for property on the Motion, holding that the PGT’s concerns could be addressed with additional information and an amended management plan. Justice Smith also held that the evidence established that Peter was acting in Annemarie’s best interest.
The Court granted leave for Peter to provide additional details and an amended management plan within 60 days of the judgment, with the matter being returnable before Justice Smith on short notice if the PGT continued to oppose the Application.
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Umair Abdul Qadir
Many young families consider estate planning a task that can wait until their children are older, until they have paid off those pesky student loans from university or more importantly until they have acquired assets with significant value. However, an estate planning consideration that often gets overlooked is who will raise your child if you die while they are a minor.
When thinking about who will raise your child if you die before they reach adulthood it is usually the presumption that the other parent will be there to raise the child. So what happens if both parents simultaneously die in an accident? Or what happens if you are the sole living parent or sole custodian of your minor child (i.e. the other parent lost the right to custody by way of court order)?
Section 61 of the Children’s Law Reform Act (“CLRA”) contemplates these situations and provides:
- (1) A person entitled to custody of a child may appoint by will one or more persons to have custody of the child after the death of the appointor.
The testamentary appointment of a minor child is effective only:
- if the parent making the appointment is the only person entitled to custody of the child on the day before the appointment take effect; or
- if both parents die at the same time or in circumstances that render it uncertain which survived the other.
I am certain it goes without saying that the decision of who you will appoint as your child’s custodian is a decision that must be given considerable thought. However, it is especially important in these circumstances because your testamentary appointment expires 90 days after it take effect. Following the expiration of the appointment your chosen custodian must apply to the Court for a more permanent order of custody. Accordingly, regardless of your testamentary appointment your appointed custodian must be able to satisfy the court that a more permanent custody order is in the best interest of the child.
Although the thought of your child being orphaned while they are a minor is inconceivable for many parents, it may nonetheless be something to give some thought.
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For thousands of children across Ontario, the Province is their legal guardian. These children are referred to as Crown Wards under the Child and Family Services Act. A Crown Wardship order will typically be made by the courts if it is found that it is in the child’s best interests that he or she no longer resides with his or her biological parents and where placing the child with another family member is not an option. In the event that a Crown Wardship order is made, the Province becomes the child’s legal guardian with all of the rights and responsibilities that this entails.
Many of these children are often removed from the care of their families as a result of being in an abusive environment. In a Class Action being brought against the government of Ontario, it is further alleged that once these children were made Crown Wards, that many continued to be victimized while in the system, including being subjected to physical, emotional, and sexual abuse.
The Class Action, which encompasses all children who were Crown Wards at any time from January 1, 1966, is seeking justice for what is viewed as the government of Ontario’s failure to protect their rights to claim for the abuse they suffered both prior to becoming Crown Wards and while under the Province’s care. Specifically, it is being claimed that as a result of the Province’s inaction, limitation periods have passed and evidence has disappeared, affecting their ability to seek damages and compensation which is in breach of their fiduciary duties.
Despite arguments by the Province that it does not owe a duty of care to the Crown Wards, the Superior Court of Ontario ruled last week that the Class Action may proceed. The Honourable Mr. Justice Fregeau dismissed the Province’s attempt to appeal the decision of the Superior Court which had granted the motion for an order that the first part of the test for certification be granted.
As the Plaintiffs continue on with the next steps in their action, it remains to be seen whether the courts will ultimately find that the Province did, in fact, owe a duty of care as legal guardian to the Crown Wards and whether any inaction in protecting their rights will be interpreted as a breach of fiduciary duty.
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Adult children of aging parents are often faced with important responsibilities. Ensuring that parents are adequately cared for is a task that many children lovingly undertake. As highlighted in this article in Forbes, key substitute decision planning ensures that the transition from independence to dependence, proceeds as smoothly as possible. Such steps should be taken immediately, and prior to the onset of dementia, or other incapacitating disorders, to ensure that one’s ability to provide instructions is unequivocal.
A power of attorney is a legal document that gives someone else the right to act on the grantor’s behalf. With the onset of incapacity, not only may the understanding of finances become increasingly difficult, but vulnerability to financial predators may increase. In fact, it is estimated that approximately 10% of the 1.5 million seniors in Ontario experience elder abuse. As such, allowing an incapacitated parent to maintain the authority to sign cheques and manage finances may be dangerous.
To preserve some degree of control, it is often the case that bank accounts are transferred into joint ownership between an adult child and their parent. This is a common practical step taken to ensure that the child who provides care to their parent has sufficient access to their parent’s funds to satisfy expenses arising. However, given the seminal decision in Pecore v. Pecore (SCC), at the time the bank account is transferred into joint ownership, careful notes must be taken to ensure that the evidence of testamentary intention regarding the account is clarified.
Meeting with an experienced lawyer that can explain the types of powers of attorneys, and the associated responsibilities, ensures the adult child has the appropriate powers to assist their parent. As well, the taking of detailed notes by a lawyer or financial institution is a prudent step to avoid possible estate disputes at a later date. While often we focus our efforts on estate planning, substitute decision planning is equally important.
As a result of the ongoing conflict in Syria, we are currently seeing one of the worst humanitarian crises in the world today. The United Nations has estimated that approximately 13.5 million people need urgent help, including 6.5 million people who have been displaced.
With human rights violations at the heart of the crisis and over 250,000 deaths so far, the Government of Canada has made the decision to implement a plan to work with private sponsors, non-governmental organizations, provincial, territorial, and municipal governments to settle 25,000 Syrian refugees here in Canada. The Government’s plan currently gives priority to vulnerable people who have registered with the United Nations Commissioner for Refugees (“UNHCR”) including women with children, unaccompanied minors, and the elderly.
The United Nations Children’s Fund reported in 2014 that of the displaced persons, approximately 8,000 were children that had fled Syria without their parents. This number has likely only increased since then as the conflict continues to intensify. As a result, it is important to bear in mind that many of the new arrivals may consist of unaccompanied minors and that in some cases, the appointment of a suitable guardian may need to be considered. In the cases where a guardian is required, it should be arranged as soon as possible.
According to the UNHCR, guardianship is a fundamental element in the protection of unaccompanied minors. The guardian’s responsibilities include ensuring that the child’s needs are being met until a more permanent arrangement for the minor can be implemented. This applies to the child’s physical, psychological, social, cultural, legal, medical, and educational needs.
In Canada, each province is primarily responsible for matters related to the reception and integration of unaccompanied minor refugees, including the appointment of a guardian. These practices can vary significantly from one province to another. For instance, in Ontario, it is the Children’s Aid Society and the Catholic Children’s Aid Society that provide child protection services for minors (up to the age of sixteen). However, in order for these agencies to be authorized to act as guardian to a child, a formal wardship order from the Ontario Court is still required.
It is important to note that the appointment of a guardian is not the same as a designated representative under the Immigration and Refugee Act who acts solely for the purpose of representing the unaccompanied minor in proceedings before the Immigration and Refugee Board.
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In Ontario, the courts have held that personal care compensation must be “reasonable”. To determine what is “reasonable” the courts must take into consideration the specific circumstances in each case. Factors to be considered were set out in the hallmark case Re Brown,  O.J. No. 5851, 31 E.T.R. (2d) 164, which include:
- the nature and extent of the services provided;
- the need for the service;
- the qualifications of the person providing the services;
- the value of such service; and
- the period over which the services were provided.
In the recent case Childs v Childs, 2015 ONSC 4036, Justice Tranmer was asked to determine whether a child of an incapable woman should be awarded compensation for providing care to her mother. In doing so, Justice Tranmer considered not only the factors set out in Re Brown but also identified additional factors that should be considered when the court is called upon to make an order for personal care compensation in the context of a parent and child relationship.
Eileen Childs has four adult children: Michael, Andrew, Peter and Caroline. She raised all of them from birth with her late husband. As Eileen’s battle with Alzheimer’s dementia and other health challenges got progressively worse, it became clear to her children that she could no longer manage her property and care for her person. Although Eileen had significant liquid assets available to cover the cost of proper homecare, her children could not agree on the care their mother was to receive.
It was Eileen’s wish to remain living in her own home. To grant this wish her daughter, Caroline, moved into her mother’s home to provide full-time in-house care and support. Eileen’s sons, Michael and Andrew also provided some care to their mother for a short period of time.
The issue to be addressed by Justice Tranmer was whether Caroline was entitled to be compensated for the in-house care that she provided to her mother.
In granting Caroline a $500 monthly stipend for compensation, Justice Tranmer makes it clear that “a child should not be paid to care for an ailing mother” but nonetheless acknowledged the principle that a guardian or attorney for personal care may be reasonably compensated for personal care provided to an incapable person. In considering the reasonableness in this case, he identified three additional factors that should be considered by the court, namely:
- the financial circumstances of the incapable person at the time the request for compensation is made;
- whether the payment of compensation poses a risk to the incapable person’s finances; and
- any sacrifices made or losses suffered to undertake the care of a parent.
In light of Justice Tranmer’s decision it appears that when a child is making a claim for personal care compensation they must keep in mind that they may not be entitled to receive compensation for the care that they provide if the payment of compensation would have a negative consequence on their parent’s finances.
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It is typically the case that a Continuing Power of Attorney for Property and/or Personal Care that is granted while the grantor is capable will survive for the life of the grantor, unless there is compelling evidence of misconduct or neglect. However, this was not the case in Corewyn v McCulloch, 2015 ONSC 6039. In this case, Justice Sweeny appointed the daughter of an incapable woman as guardian, despite the fact that there was a valid Continuing Power of Attorney in favour of the incapable woman’s husband and no evidence of misconduct or neglect.
Ena and her husband Bill had been married for over 32 years. Ena executed a Continuing Power of Attorney in favour of her husband in February 1999, and in 2007 Ena was diagnosed with Alzheimer Dementia and became incapable of managing her property and personal care. Although Bill was Ena’s Attorney for Property and Personal Care, he was not very involved in health and personal care decisions for Ena. Instead, Ena’s daughter Donna made many of the personal care decision on behalf of Ena with some consultation with Bill. Donna also provided Bill will personal care assistance.
Issues began to arise after Ena broke her hip and required additional care. After Ena broke her hip, Donna arranged for her to be moved to a new care facility where her personal care needs could better be meet. Donna also arranged for a personal support worker (“PSW”) to assist her mother on a daily basis for approximately 25 hours per week.
At the same time Bill executed Powers of Attorney in favour of Donna but soon became suspicious of Donna’s motive. He consulted with a lawyer and his daughter, Sara and made the decision to revoke the Powers of Attorney in favour of Donna and granted new Powers of Attorney to Sara.
In her capacity for Attorney of Property for Bill, Sara made the decision to reduce Ena’s personal support worker visits to two hours per day. This caused Donna to become concerned about her mother’s care and the decisions that Bill and Sara where making on Ena’s behalf.
On March 28, 2015 Donna and Sara made an agreement that resulted in Ena and Bill dividing their assets 50/50. Following this agreement, Bill withdrew $75,000 from a joint account held with Ena. Donna then took her mother to the bank to withdraw the remaining $19,000. Donna then commenced a guardianship application to be granted the legal authority to make personal care and financial decisions on behalf of her mother.
In accordance with sections 22(3) and 55(2) Substitute Decisions Act (“SDA”), Justice Sweeny was satisfied that Ena was incapable of making decisions regarding her property and personal care that such decisions could not be met by any alternative course of action.
In dealing with the issue of whether Bill’s Powers of Attorney should be terminated, Justice Sweeny acknowledged that to do so required clear evidence of misconduct or neglect, which was simply not present in this case. Nonetheless, Justice Sweeney cited case law that suggests that the courts may substitute a decision maker where a valid Power of Attorney no longer served the best interest of the incapable person.
In granting Donna’s application for guardianship, Justice Sweeny stated that in considering the best interest of Ena “the court must take into consideration the changing nature of a person’s needs and always focus on what is in the best interests of the person at the particular time the appointment is sought to be made…”
In considering the factors set out in section 24(5) of the SDA, Justice Sweeny held that Ena’s appointed had not only appointed Donna as her substitute Attorney for Property and Personal care but that Donna had acted as de facto Attorney Ena for numerous years with Bill’s knowledge. Further, she had always acted in Ena’s best interest. In light of these facts and sufficient evidence that Bill had not taken an active role in making decisions on Ena’s behalf, Justice Sweeny found it to be in the best interest of Ena to appoint Donna as guardian of the person for Ena.
This cases now suggests that the best interest an incapable person may be an additional factor to be considered when the court is asked to terminate a valid continuing power of attorney. Accordingly, solicitors should be mindful of this consideration when acting for an Attorney for Property or an Applicant in a Guardianship Application.
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The Substitute Decisions Act directs that, when a person who does not reside in Ontario is appointed as a guardian of property, that person must provide security, as approved by the Court, for the value of the property to be administered. However, the Court also has discretion to waive the requirement that security be provided by a non-resident guardian of property. Under what circumstances the Court will exercise its discretion to waive the requirement to post security when appointing a non-resident guardian of property is unclear within the legislation and little guidance is provided by the sparse case law that deals with this issue.
In a paper presented by Dermot Moore of the Office of the Public Guardian and Trustee (the “PGT“) at this year’s Six-Minute Estates Lawyer, Mr. Moore outlined the policy of the PGT on recommending security when a non-resident guardian of property is being appointed. The PGT will typically recommend that security be required in the following circumstances:
- If the proposed guardian is not a parent or spouse of the incapable person and the value of property is greater than $100,000.00;
- If the proposed guardian is a parent or spouse, the incapable person does not own real property, and the value of the property is greater than $250,000.00; and
- If the proposed guardian is a parent or spouse, the incapable person owns real property, and the value of the property is greater than $500,000.00.
It may be worth noting that in a jurisdiction such as Toronto, where property values are so high, a guardianship application by a non-resident of Ontario in respect of the average person who own real property will result in a recommendation by the PGT that security be posted.
In his paper, Mr. Moore notes that it is not infrequent for the Court to dispense with the requirement that security be provided if there is some argument in support of waiving the requirement. One of the few decisions in which the issue of security in the appointment of non-resident guardians has been considered is Salzman v. Salzman, 2011 ONSC 3555, 2011 CarswellOnt 15786. In this case, a resident of Quebec was appointed as guardian of property for his mother and was not required to post security upon his appointment. In dispensing with the requirement to post security, Justice Hoy made note of the proposed guardian’s close relationship with his incapable mother, his historical assistance in managing her affairs, and the consent of his siblings, the only other beneficiaries of his mother’s estate, to the non-resident’s appointment and the dispensing of the requirement to post security.
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