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PROTECT YOUR ELDERLY PARENTS:BECOME YOUR PARENTS’ GUARDIAN OR TRUSTEE

Lynne Butler, Lawyer

Self-Counsel Press(a division of)International Self-Counsel Press Ltd.Canada USA

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INTRODUCTION xv

1 THE DIFFERENCE BETWEEN A GUARDIAN AND TRUSTEE 11. Understanding the Difference between a Guardian and Trustee 1

1.1 Guardianship 31.2 Trusteeship 5

2. Provinces and Territory with Special Situations 62.1 Manitoba 62.2 Nova Scotia 72.3 Nunavut 7

3. In the Best Interests of the Dependent Adult 7

2 DOES YOUR PARENT NEED A GUARDIAN OR TRUSTEE? 91. Indications That Guardianship May be Necessary 102. Indications That Trusteeship May be Necessary 103. Identifying Mental Incapacity 11

v

CONTENTS

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4. Medical Evidence You Will Need 124.1 The best medical evidence 144.2 How to get the medical evidence 15

3 ALTERNATIVES TO APPLYING FOR COURT-ORDERED GUARDIANSHIP AND TRUSTEESHIP 161. Why You Should Consider Alternatives 162. Informal Trusteeship 173. In-Home Support 184. Placing Assets in Joint Names 195. Health Care Directive 216. Representation Agreements 22

6.1 Agreements in British Columbia 226.2 Co-Decision-Making in Saskatchewan 236.3 Agreements in the Yukon 23

7. Enduring Power of Attorney 248. Temporary Guardianship and Trusteeship 259. An Important Note about Wills 25

4 PUBLIC GUARDIAN AND PUBLIC TRUSTEE 261. The Public Guardian and Trustee as Guardian/Trustee for Your Elderly Relative 262. Family Members in Dispute 273. What Does the Public Trustee Do As a Trustee? 284. Review of All Guardianship and Trusteeship Applications 29

4.1 If the Public Guardian and Trustee objects to your application 305. Ongoing Input 306. Permission for Costs to Be Paid by the Crown 317. Special Accounting Provisions 31

7.1 British Columbia 317.2 Saskatchewan 32

5 WHAT YOU NEED TO KNOW ABOUT GUARDIANSHIP 331. Who Is Eligible to Be a Guardian? 33

1.1 What does it mean to be in a position of conflict? 34

vi Protect your elderly parents: Become your parents’ guardian or trustee

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Contents vii

2. Who Would Be a Good Choice for Your Elderly Relative? 373. Appointing Joint Guardians 384. Appointing an Alternate Guardian 395. The Powers Given to Guardians by Law 406. How to Know Which Powers You Should Request 41

6.1 The power to decide the dependent adult’s living arrangements 416.2 The power to decide if the dependent adult will engage in social activities 426.3 The power to decide if the dependent adult will work 426.4 The power to decide the dependent adult’s participation in

educational, vocational, or other training 436.5 The power to decide the dependent adult’s ability to apply for any

licences or permits 436.6 The power to deal with legal proceedings that do not relate to the

dependent adult’s property 436.7 The power to make decisions regarding health care 446.8 The power to decide normal day-to-day matters 446.9 The power to physically restrain the dependent adult when necessary 45

7. Special Power of Purchase of Necessaries 458. Payment for Being a Guardian 459. Restrictions on Guardians 46

6 HOW A COURT-ORDERED GUARDIANSHIP IS ENDED 471. Removal of a Guardian by the Court 472. Voluntarily Asking to Be Discharged 483. Death of a Guardian 494. Death of the Dependent Adult 49

7 WHAT YOU NEED TO KNOW ABOUT TRUSTEESHIP 501. Residency Can Be an Issue When Applying to Be a Trustee 502. Who Would Be a Good Choice for Trustee? 513. Powers Given to Trustees by Law 524. Payment for Acting As a Trustee 54

4.1 Guidelines for Payment by Province or Territory 555. Personal Liability 57

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viii Protect your elderly parents: Become your parents’ guardian or trustee

8 RESTRICTIONS ON TRUSTEES’ ACTIONS 601. Investments 602. Trustee’s Undertakings 623. The Dependent Adult’s Will 62

3.1 Following the dependent adult’s existing will 634. Using the Dependent Adult’s Money to Support Others 645. Keeping the Trustee’s Money Separate from the Dependent Adult’s Money 676. Conflict of Interest Situations 67

6.1 The trustee buying property from the dependent adult 676.2 The trustee taking gifts or loans from the dependent adult 67

7. Beneficiary Designations 68

9 TRUSTEE FILING OF INITIAL INVENTORY 691. When to File the Initial Inventory 702. Determining which Property to Include in the Initial Inventory 703. Determining the Value of the Property 71

3.1 Real estate 723.2 Mineral titles and leases 733.3 Vehicles 733.4 Bank accounts, RRSPs, RRIFs, and portfolios 733.5 GICs 743.6 Canada Savings Bonds 743.7 Stocks and shares 753.8 Collections, antiques, and artwork 76

4. Joint Property 77

10 HOW TRUSTEESHIP IS ENDED 781. Discharge of a Trustee by the Court 782. Passing of Accounts is Required 793. Removal of a Trustee by the Court 804. Death of a Trustee 80

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Contents ix

11 HOW TO APPLY TO THE COURT FOR A NEW GUARDIANSHIP AND/OR TRUSTEESHIP 811. Application 812. Supporting Affidavit 823. Consents 84

3.1 Proposed guardian and/or trustee 843.2 Nearest or next nearest relative 84

4. Notice of Objection 855. Know When to Consult a Lawyer 866. Orders 86

12 FILING DOCUMENTS AT THE COURTHOUSE 881. Which Documents to File 892. Where to Go to File the Documents 893. Cost of Filing 894. Documents Rejected by the Clerk of the Court 89

13 SERVING THE DOCUMENTS 921. Who to Serve 932. Service by Registered Mail 933. Personal Service 944. Proof of Service 955. Preparing an Affidavit of Service 95

14 WHAT TO DO AFTER THE ORDER IS GRANTED 971. Filing 972. Effective Date of Order 983. Note Review Periods 984. File Inventory 985. Costs of the Application 986. How to Use the Order with Institutions and Businesses 997. Serving Copies on Required Parties 1018. Read the Act 1019. Record Keeping for Guardians 102

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x Protect your elderly parents: Become your parents’ guardian or trustee

10. Record Keeping for Trustees 10311. Be Informed 103

15 COURT REVIEWS 1041. Statutory Review Periods 1052. New Medical Evidence Is Needed 1053. New Consents Are Needed 1064. How to Apply for a Review 1065. Documenting the Decisions Made by a Guardian 1066. Documenting the Decisions Made by a Trustee 107

16 PASSING OF ACCOUNTS FOR TRUSTEES 1081. What the Passing of Accounts Shows the Court 108

1.1 Overall financial picture 1081.2 Maximizing the dependent adult’s financial situation 1091.3 Use of the dependent adult’s property 1101.4 Adequately providing for the dependent adult 1101.5 Living within the dependent adult’s means 1101.6 How the assets are currently held 1101.7 Staying within the trustee’s authority 110

2. Setting an Accounting Period 1113. Preparing Financial Statements in Jurisdictions Where There Are No Set Forms 1124. Ledger 1125. Opening and Closing Inventories 1136. Summaries and Reconciliation 1147. Request for Compensation 116

17 DEATH OF THE DEPENDENT ADULT 1181. Advise Public Guardian and Trustee 1182. End of Guardianship and Trusteeship Order 1183. Account to the Executor 119

18 CHECKLISTS 121

19 FORMS ON CD 125

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Contents xi

TABLES1 Province and Territory Name of Person in Need of Assistance 22 Province and Territory Court-Appointed Guardian Names 43 Province and Territory Court-Appointed Trustee Names 64 Summary of Qualifications to Be a Guardian 355 Initial Court Filing Fee 90

SAMPLES1 Ledger 722 Daily Ledger 1133 Opening and Closing Balance Formula 1154 Summary of Income 1155 Summary of Expenses 1166 Reconcile the Accounts 117

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1. Understanding theDifference between aGuardian and Trustee

If you are reading this book, you are mostlikely in the following situation:

• It has become clear to you that an eld-erly parent needs assistance of somekind, whether it is with personal- and/orhealth- care matters, financial matters,or both personal and financial matters.

• None of the alternatives such as homecare, power of attorney, or Health CareDirectives discussed in Chapter 3 are suit-able for the elderly relative in question.

• You have decided that the court system,though it is a last resort, is the bestchoice right now for the elderly relativein question.

This chapter will help you clarify the dif-ference between a guardian and trustee. A per-son may apply to the court to be appointed asa guardian or a trustee, or both. This book willconsider guardianship and trusteeship to betwo different roles, even though one personcan, and often does, do both jobs at once. Ifyou are applying for both, you only have tomake one application. Chapter 2 will help youunderstand which role is suitable for your eld-erly relative.

The main difference between guardianshipand trusteeship lies in the type of decisionsthat must be made by the person who is ap-pointed. The type of decisions that need to bemade will depend on the unique situation andneeds of the person who is being protected.For example, some elderly adults can live ontheir own reasonably well but cannot managetheir finances, while others are just the oppo-site. The elderly person being protected will

1

THE DIFFERENCE BETWEEN A GUARDIAN AND TRUSTEE

1

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2 Protect your elderly parents: Become your parents’ guardian or trustee

be referred to as a “dependent adult” in thisbook because he or she is an adult who is nowbecoming dependent on others for assistance.

In provincial and territorial statutes, theperson who is in need of assistance is referredto by different names. In order to make it eas-ier for you to read and understand your ownlocal laws, use Table 1 to determine what sucha person is properly called in your province orterritory.

You will note that in most cases, the termsused to describe an adult who needs assis-tance with decision making refer to the con-cept of being incapable or incapacitated. Asmore and more parts of Canada modernizetheir laws dealing with assisting incapacitatedadults, the language used in those laws also

becomes more up-to-date. By and large,Canada has done away with language that re-ferred to incapacitated adults in somewhatderogatory terms, though one or two provinceshave yet to reform their laws. The modern-day laws recognize that adults who are losingor have lost their capacity should be treatedwith respect and dignity.

Guardianship and trusteeship should notbe undertaken lightly. Keep in mind thatCanada’s Charter of Rights ensures each per-son the right to life, liberty, and security of theperson. You must understand that by asking acourt to appoint you as someone else’sguardian or trustee, you are asking it to takeaway another person’s right to run his or herown affairs. For this reason, you are encour-aged to ask the court only for the powers you

Table 1NAME OF PERSON IN NEED OF ASSISTANCE BY PROVINCE AND TERRITORY

Province or Territory Name of Person in Need of Assistance

Alberta Dependent adult

British Columbia Patient

Manitoba Incompetent person

New Brunswick Mentally incompetent person

Newfoundland and Labrador Mentally disabled person

Northwest Territories Represented person

Nova Scotia Mentally incompetent person

Nunavut Represented person

Ontario Incapable person

Prince Edward Island Incompetent person

Saskatchewan Incapable adult

Yukon Incapable adult

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The difference between a guardian and trustee 3

need to assist the dependent adult, and nomore. Asking for more is at best interferenceand at worst, an infringement on another per-son’s rights.

The general attitude that you should takewhen considering guardianship and trustee-ship is that dependent adults should be en-couraged to remain as independent as possiblefor as long as safely possible. Only the helpthat is requested or needed by a dependentadult should be given. Taking away an individ-ual’s independence can be an indignity to theperson that is in some cases avoidable. Someelderly people feel angry and violated if un-wanted assistance is imposed on them by well-intentioned family members who have tooheavy a hand. Guardians and trustees shouldtread as lightly as possible while giving the as-sistance that is needed.

Guardianship and trusteeship laws werecreated for one purpose only, which is to as-sist a dependent adult. All of the provincialand territorial statutes give the courts the dis-cretion to appoint a guardian and trustee ifthe court believes it to be beneficial to the de-pendent adult.

Provincial and territorial legislatures arealso doing away with laws that allow aguardian or trustee to have absolute and fullcontrol of a person and his or her health careand finances once incapacity has been shown.The more forward-thinking provinces and ter-ritories recognize that individuals sufferingfrom loss of capacity do not necessarily needevery single area of responsibility taken fromthem. This is where the difference betweenguardianship and trusteeship comes in. It issimply a matter of time until all areas ofCanada are fully modernized in this way.

1.1 GuardianshipA guardian deals with decisions of a personalnature. This includes health-related decisionssuch as whether the dependent adult shouldhave a particular surgical operation, take spe-cific medication, or see a doctor. It usuallyalso extends to other personal decisions suchas where the dependent adult will live andeven small, day-to-day decisions such as whatthe dependent adult will eat and what he orshe will wear. The guardian is the person whowould make those decisions on behalf of thedependent adult. As each individual depend-ent adult is different, so will the decisionsneeded to be made by each guardian. Thegeneral idea is to assist the dependent adultwhere necessary while allowing him or her tolive as independently as possible.

A guardian does not make decisions relat-ing to money, bills, investments, finances, orproperty. A guardian has no authority to sellor rent a dependent adult’s house, pay his orher bills, receive an inheritance on his or herbehalf, or invest the dependent person’s savings.

The Guardianship and Trusteeship Act ofthe Northwest Territories, though it only ap-plies to Northwest Territories and Nunavut,contains valuable guidance for anyone who isgoing to act as a guardian, regardless of wherethey live. Similar guidelines are expressed inthe laws of other parts of Canada as well.

The following is a paraphrased summaryof what the Northwest Territories’ act says. Indeciding what decision is in the best interestsof the dependent adult, the guardian shalltake the following into consideration:

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• If the guardian knows of a wish or in-struction that was expressed by the de-pendent adult when the dependentadult was still mentally capable, theguardian shall make decisions in accor-dance with that wish or instruction.

• If the dependent adult’s current wishescan be determined, then the guardianshall make decisions in accordance withthe dependent adult’s current wishes.

• A guardian shall encourage the de-pendent adult to participate, to the bestof his or her ability, in the guardian’sdecisions.

• A guardian shall foster regular personalcontact between the dependent adultand his or her supportive friends andfamily.

• A guardian shall consult from time totime with the dependent adult’s sup-portive friends and family as well as thedependent adult’s caregivers.

• A guardian shall foster the dependentadult’s independence as much as possible.

Guardian is the term used in most Cana-dian provinces and territories, but someprovinces call a court-appointed guardian by adifferent name. See Table 2 for the namesused in each province and territory.

Table 2COURT-APPOINTED GUARDIAN NAMES BY PROVINCE AND TERRITORY

Province and Territory Court-Appointed Guardian Names

Alberta Guardian

British Columbia Committee of person

Manitoba Committee for personal care

New Brunswick Committee of person

Newfoundland and Labrador Guardian

Northwest Territories Guardian

Nova Scotia Guardian

Nunavut Guardian

Ontario Guardian

Prince Edward Island Guardian

Saskatchewan Personal guardian

Yukon Guardian

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Chapters 5 and 6 will tell you more aboutwhat is involved in being a guardian.

1.2 TrusteeshipA trustee makes decisions about money, realestate, and personal property. Often theremust be cooperation between the guardianand trustee if they are different people, suchas the case in which a dependent adult ismoved from his or her residence to live in along-term care facility. The guardian chooseswhich facility is appropriate. The trusteearranges for the paying of the facility’s bills.The trustee may also, depending on the situa-tion, arrange to sell the dependent adult’shome, clear out and distribute the contents ofthe house, and invest the sale proceeds on be-half of the dependent adult. In this way, bothguardianship and trusteeship roles are calledupon.

In law, a trustee is anyone who holds ontoor looks after money or property for someoneelse. If you are the trustee, you have control ofthe money or property, but you do not own it.As the trustee, you are not holding the moneyor property for your own benefit or for thebenefit of your family or friends. You are notentitled to use it for anyone but the depend-ent adult and his or her dependants. You areholding on to the property and money andmanaging them on behalf of the dependentadult. You are called a trustee because youhave been entrusted to be the caretaker ofsomeone else’s property.

You should note that in legal documents,when the phrase money or property is used, theword property does not just mean real estate.This can sometimes be confusing, becausewhen the word property is used in a non-lawcontext, it usually means a house or land.

When talking about trusteeship, property canmean both real estate (e.g., land, house, rev-enue property, summer cottage, or minerallease) and personal property (e.g., money, vehi-cle, mobile home, jewellery, furniture, cloth-ing, tools, machinery, livestock, inheritance,investments, mutual funds, bonds, collections,artwork, corporate shares, intellectual prop-erty, and almost anything else that is not realestate). Throughout this book, the word prop-erty will mean both real and personal property.

It is essential to note that being appointedas a trustee does not give you permission todo whatever you want with the dependentadult’s property. There is a widespread im-pression among Canadians that a trustee,once appointed by the court, can do whateverhe or she wants with the money. Nothingcould be further from the truth. As a trusteeyou must carefully read the court order thatappoints you so that you know the limits ofyour authority. In addition, there are laws inplace that put restrictions on what all trusteescan do, even though those laws may not bementioned on the specific court order. If youintentionally or carelessly cause a financialloss to a dependent adult, you can be heldpersonally liable for that loss. Chapter 8 willtell you more about the restrictions placed ona trustee by law.

A trustee is a fiduciary. This word de-scribes a legal relationship in which thetrustee must always, without fail, act in thebest interests of the dependent adult, even ifdoing so means he or she acts against his orher own interests. This is not always easy tounderstand or to do. By agreeing to act astrustee, the trustee is willingly taking on a rolein which he or she always acts in a way that isintended to benefit the dependent adult.

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Across Canada, the role of a court-appointed trustee is called by one of threenames, those being trustee, committee, orguardian. Table 3 lists the names for eachprovince and territory.

Regardless of what this role is called inyour province or territory, this book will, forease of reading, refer to someone appointedto look after another person’s property as atrustee. However, the forms on the CD use thecorrect term for each province and territory.

Chapters 7 through 10 will tell you moreabout trusteeship.

2. Provinces and Territory withSpecial Situations

Manitoba, Nova Scotia, and Nunavut havespecial situations when it comes to guardian-ship and trusteeship. The following sectionsexplain the special situations you may en-counter if you are dealing with the law inthose provinces and territory.

2.1 ManitobaIn Manitoba, there are two laws that have todo with being appointed as the guardianand/or trustee of an adult. One is the Mental

Table 3COURT-APPOINTED TRUSTEE NAMES BY PROVINCE AND TERRITORY

Province and Territory Name for Trustee

Alberta Trustee

British Columbia Committee of estate

Manitoba Committee for property

New Brunswick Committee of estate

Newfoundland and Labrador Guardian

Northwest Territories Trustee

Nova Scotia Guardian

Nunavut Trustee

Ontario Guardian of property

Prince Edward Island Committee

Saskatchewan Property guardian

Yukon Guardian

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Health Act and the other is the VulnerablePersons Living with a Disability Act. The pro-cedures and forms are very different for thetwo laws and anyone who wants to make a courtapplication to become someone’s guardian ortrustee must figure out which procedure he orshe is to follow.

The Vulnerable Persons Living with a Dis-ability Act only applies to an adult who loseshis or her capacity if that incapacity manifestsitself before the adult reaches adulthood. Thiswould not appear to be relevant to the peoplewe are most concerned about in this book.Given that this book focuses on elderly peoplewho are losing their capacity due to aging, it ishighly unlikely that this act will apply. There-fore, residents of Manitoba will find that thisbook focuses only on applications that may bemade under the Mental Health Act.

In the event that you are not sure whichprocedure applies to your situation, you maywish to discuss it with the very helpful and ap-proachable staff of the Office of the Vulnera-ble Persons’ Commissioner in Winnipeg.Contact information is available on the CD.

2.2 Nova ScotiaIn Nova Scotia, most applications for the ap-pointment of guardians are made under theIncompetent Persons Act. However, NovaScotia also has a second way of being ap-pointed as the guardian of an adult personwho has lost capacity, that being the Inebriate’sGuardianship Act. The procedure is the same.As may seem obvious, the latter act specifi-cally refers to a loss of capacity that is broughtaround by a person’s habitual drunkennessand is not specifically related to aging. As thefocus of this book is on incapacity due toaging, all of the forms and information in this

book will refer to the Incompetent PersonsAct only.

2.3 NunavutWhen Nunavut became Canada’s newest ter-ritory in 1999 by splitting off from the North-west Territories, it retained some of the lawsof the Northwest Territories and adoptedthem as their own. One of the laws of theNorthwest Territories that still applies inNunavut is the Guardianship and TrusteeshipAct, which sets out the rules, procedures, andforms for the appointment of guardians andtrustees for adults. Therefore, all of the infor-mation in this book that applies to the North-west Territories also applies to Nunavut.

You will note that there are a few changesto the forms that are used for making your ap-plication. For example, you must refer to theNunavut Court of Justice rather than theNorthwest Territories court. These changeshave already been made on the forms forNunavut readers.

3. In the Best Interests of theDependent Adult

There are not a lot of legal guidelines as towhat does and does not constitute acting inthe best interests of a dependent adult and itmay not be easy for you to determine what isin the best interests of your elderly relative.Obviously acting in his or her best interestscannot mean that you only do what the de-pendent adult wants, as some of the wishes ex-pressed by a dependent adult may beunreasonable. After all, you would not be inthe position of guardian and trustee in thefirst place if the dependent adult was fully ca-pable of making all his or her own decisions.

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For example, many elderly people are un-derstandably distraught at the thought ofleaving their homes and moving into long-term care facilities or at the need to give updriving their own vehicles. This is often seenby the dependent adult as more of a punish-ment than anything as it represents a severeloss of freedom, independence, and even iden-tity. However, you, as the guardian, may haveno choice but to take steps to move the de-pendent adult or to have his or her driver’s li-cence revoked if the dependent adult simplycannot manage safely on his or her own anylonger. In a case like that, what the dependentadult wants and what is in his or her best in-terest are not the same.

The wishes and intentions of a dependentadult should always be taken into considera-tion whenever it is possible to do so. Not alldependent adults suffer from a problem so se-vere that they can have no input whatsoeverinto things such as selection of birthday giftsfor grandchildren, plans for vacation, orwhether they need to see a doctor. Where thedependent adult is able to offer input that isreasonable in the circumstances, it is in thebest interest of the dependent adult for thatinput to be heard and acted upon. Rememberthat you, as a guardian and trustee, haveagreed to act in the least restrictive mannerpossible and you should remain open to opin-ions expressed by the dependent adult.

A mistake that is frequently made by chil-dren who become guardians of their parents isto set up matters in a way that is convenientfor themselves, regardless of whether it is en-joyable, comfortable, or agreeable for the par-ents. This can lead to neglect and even abuse.

It is absolutely essential that you work withyour elderly relative to try to determine his orher wishes and to work within them wheneverpossible.

In determining whether having a guardianor trustee appointed for your elderly relativeis in the elderly relative’s best interests, con-sider the following questions:

• Can the elderly relative make all per-sonal and financial decisions for himselfor herself safely and happily right now?

• If so, how long is that situation likely tocontinue?

• How would the elderly relative’s life beimproved in the short term and in thelong term by having a guardian ortrustee appointed?

• What risk is the elderly relative runningby refusing decision-making help?

• Is there an urgent situation existingright now that must be addressedquickly?

• Are there any solutions available thatare less intrusive than a court-appointed guardianship or trusteeship?(See Chapter 3 regarding alternatives.)

• Has the elderly relative ever made anysuggestions or given any instructionsabout who he or she would like to livewith or who he or she would like to havein charge of his or her affairs?

Chapter 2 may help you answer thesequestions.

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