The Purpose of Guardianship
Guardianship in Ontario grants legal authority to individuals to act on behalf of others incapable of decision-making due to reasons such as mental illness, developmental disabilities, or aging-related issues.
The primary objective of Ontario’s guardianship laws is to ensure decisions made for the incapable person are in their best interests and uphold their rights. The gravity of this role impacts nearly every aspect of the person’s life. Diligent and sensitive performance by the guardian aims to provide the incapable person with the best possible quality of life within their means. Failing in this duty can cause severe harm, emphasizing the need for high standards of honesty, integrity, and trust in the guardian.[i]
When transferring control of income and assets to a guardian of property, it’s crucial to note that ownership remains with the incapable person. The guardian’s role is one of responsible management, not assumption of ownership or personal liability for the person’s financial obligations.[ii]
Types of Guardianship
In Ontario, there are two primary types of guardianship:
(1) Guardian of Property: A guardian of property is responsible for managing the financial affairs and assets of the incapable person. In your role as a guardian of property, you have the authority to handle all property-related matters on behalf of the incapable person, mirroring actions they could perform if capable. However, you cannot engage in actions that alter property inheritance, such as creating a Will or making changes that impact who inherits the person’s property.
As a Guardian of Property, you have the authority to conduct the following on behalf of the incapable person:
- Initiate and close bank accounts;
- Redirect pensions and other income sources;
- Apply for entitled benefits or supplementary income;
- Select pension plan options;
- Handle investment matters;
- Manage debt collection;
- Cover bill payments;
- Make purchases of goods and services;
- Initiate or defend legal actions, especially with financial implications;
- Facilitate lending, selling, storing, or disposing of personal belongings; and
- Oversee the maintenance or sale of real estate and vehicles.[iii]
(2) Guardian of Personal Care: A guardian of personal care is responsible for making determinations regarding an individual’s healthcare, nutrition, living arrangements, clothing, hygiene, and safety when they lack the capacity to make these decisions independently.[iv]
The Substitute Decisions Act
The Substitute Decisions Act, 1992 (“SDA”), serves as the cornerstone legislative framework for guardianship in Ontario. It delineates the procedures and regulations for designating guardians for property and personal care decisions. Additionally, it establishes the structure for generating powers of attorney for personal care and property.
Within the ambit of the SDA, the appointment of a guardian typically occurs through either a court order or a power of attorney document:
- Court-Appointed Guardianship: When no valid power of attorney exists, and there is a determination of the need for a guardian, an application is made to the court. The court assesses the individual’s capacity and circumstances to decide on the necessity of a guardian. If appointed, the court explicitly defines the powers and responsibilities of the guardian.
- Power of Attorney: In situations where an individual possesses decision-making capacity but wishes to plan for the future, they can draft powers of attorney documents. These documents enable them to designate a trusted individual to act on their behalf in the event of future incapacity. Powers of attorney can encompass personal care, property, or both.
Legal Responsibilities
The legal responsibilities of a guardian include but are not limited to:
- Ensure that the finances of the individual lacking capacity are kept separate and used solely for in their best interest.
- Prioritize the personal comfort and well-being of the incapable person in financial decisions.
- Manage property in a manner aligned with the person’s personal care decisions.
- You must consult from time to time, with supportive family members and friends who are in regular contact with the incapable person and with people providing personal care (for example, nurses, doctors, and support workers) to the incapable person.
- Encourage the person’s involvement in property-related decisions to the extent they can understand.
- Act in accordance with the management plan submitted during the guardianship application.
- Make reasonable efforts to understand the person’s will and adhere to its directives.[v]
Maintaining and Passing Accounts
Ontario Regulation 100/96, titled “Accounts and Records of Attorneys and Guardians”, is a regulation in Ontario which delineates the legal obligations for attorneys and guardians responsible for managing the financial matters of incapacitated individuals. This regulation sets forth clear guidelines for maintaining accurate financial records, reporting, and ensuring accountability, thereby ensuring prudent and transparent management of these individuals’ assets. It serves as a vital framework to safeguard against financial abuse and uphold the welfare of vulnerable individuals under the care of attorneys and guardians.[vi]
In various circumstances, you may be mandated to submit these records to the court for thorough examination, aligning with the provisions outlined in Ontario Regulation 100/96.
Maintaining Confidentiality
You are not allowed to disclose any information contained in the accounts and records unless required to do so in order to make transactions on the incapable person’s behalf or otherwise fulfil your duties as a guardian, or if required by the SDA or any other Act, or if ordered to do so by a court.[vii]
Compensation
As a guardian of property, you are eligible for compensation for your services. The specific compensation rates are outlined in the fee scale defined by Ontario Regulation 26/95. Effective April 1, 2000, you are entitled to receive compensation, which comprises 3% on both capital and income received and disbursed by you, as well as 3/5ths of 1% of the annual average value of the assets, known as the care and management fee.[viii]
In cases where you require compensation beyond the prescribed amount in the fee scale, you must obtain written consent from the Public Guardian and Trustee, along with the guardian of the person or the attorney designated under a power of attorney for personal care for the incapable individual, if applicable.[ix]
Contact Derfel Estate Law in Toronto for Trusted Guardianship Advice
The professional estate and guardianship lawyers at Derfel Estate Law help clients protect the financial, health, and personal interests of their loved ones. We provide strategic and compassionate advice that protects all relevant parties throughout the process and eases clients’ concerns. We also offer estate probate and administration services and advocate for clients in estate litigation, including trustee and executor disputes, Will challenges, and passing of accounts. To schedule a confidential consultation, contact us online or call 416-847-3580.
This post was co-authored by David Derfel and Articling Student, Owais Hashmi.
“This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.”
[i] Office of the Public Guardian and Trustee, Duties and powers of a guardian of property Ontario (2020), online: Publications Ontario: <https://www.publications.gov.on.ca/store/20170501121/Free_Download_Files/300633.pdf> at page 3.
[ii] Ibid.
[iii] Ibid at page 4.
[iv] Ibid.
[v] Ibid at page 5.
[vi] Ibid at page 9.
[vii] Ibid at page 11.
[viii] Ibid at page 7.
[ix] Ibid.
