Alternatives for managing an incapable person’s finances in Ontario

Last year, an elderly gentleman called me with the following problem. His dear wife was now in a fairly advanced stage of dementia and was not capable of signing a valid power of attorney for property.   He was very surprised when their bank denied him access to her personal (non-joint) bank account to help pay their rent and other expenses.  Her government pensions were being deposited to that account.  His own financial resources were inadequate to support them both on an on-going basis.  Furthermore, the family car was in her name and its registration papers had been lost.  Overall, a sad example of poor planning, but a ‘real world’ problem that requires a creative solution.

What could he do?  A ‘full throttle’ application to appoint someone as legal guardian of property is very expensive.   If his wife did not object to a capacity assessment, he could retain a certified capacity assessor under the Ontario Substitute Decisions Act, 1992 to trigger a statutory guardianship.   The Ontario Public Guardian and Trustee (“OPGT”) would then, by law, become the wife’s ‘statutory guardian’ of property.   The investigation of his wife’s finances and file set-up could take several months.  It could feel quite intrusive if the OPGT challenged the husband on how he was managing the couple’s expenses.  The husband could apply to replace the OPGT as statutory guardian and would likely be successful if an appropriate management plan and application were filed.  Legal advice is recommended to do this properly.

For this couple, some informal and inexpensive arrangements could be put in place that might be quite adequate for some time.

First, it seems much simpler for the husband to be appointed as a Private Trustee for purposes of receiving and managing his wife’s OAS, CPP and/or GIS.   He could open another bank account to which he has access, and change the direct deposit from his wife’s personal account to this new account under his control.  I would recommend that the husband open a new account specifically for the purpose of his wife’s deposits and expenses.  He would need to complete and provide several documents to Service Canada, including an Agreement to administer benefits, a medical ‘Certificate of Incapability’ and a new request for direct deposit.  (A similar arrangement is available for private trusteeships of ODSP payments.)

Becoming the Private Trustee of his wife’s benefits means that the husband would be responsible for managing those benefits in her best interests.  He would be responsible for notifying Service Canada of her death, and reimbursing any overpayments.  He would NOT be her guardian for any other financial purposes.

The bank is unlikely to allow prior benefits that accumulated in the wife’s personal bank account to be transferred to the new account.  However, those funds could be accessed to pay for the wife’s funeral, and probably also for payments to any long-term care residence, if the wife were admitted in the future.

With respect to the vehicle registration, a lost document can be replaced if the wife is capable of signing a request letter, to be filed with a Service Ontario office along with a copy of her ID.  The new registration slip would be mailed to her address on file with the Ministry of Transportation.  She may not have sufficient legal capacity to transfer legal ownership of the vehicle.  It may be simpler for the husband to continue to use the vehicle and to transfer ownership after his wife’s death.

Income tax returns can be filed informally by the husband for his wife.  In practice, the Canada Revenue Agency does not insist on a signature on the return.  However in the event of a dispute or inquiry, it may be impossible to deal directly with CRA without either a pre-existing representation document on file (form T1013), a power of attorney or guardianship.  Again this would require balancing the cost and value of a tax matter vs. obtaining legal authority as a guardian of property.

In the end, my elderly client located a power of attorney that his wife had signed many years ago, and he’d forgotten about it….. So all’s well that ends well!