This blog aims to provide readers with an understanding of the concept of guardianship for property, including its intricacies, associated risks, and potential solutions.
A guardianship is a legal relationship sanctioned by the court. It comes into play when the Court determines that an individual lacks the capacity to make sound decisions. In such cases, the Court appoints a suitable guardian based on evidence presented by two physicians who have assessed the individual and confirmed the individual’s inability to make appropriate decisions. Additionally, the court appoints an attorney to represent the interests of the incapacitated person. In Ontario, guardianship comes in two forms: property and personal care decisions. A guardianship is needed when the incapacitated person cannot give consent on some important decisions (for example, the sale of their home in order to pay for their care).
But what is the difference between a power of attorney for property and a guardianship for property? A power of attorney is a legal document executed while an individual is mentally capable of making their own decisions. Typically, this document outlines the grantor’s preferences concerning financial matters. Moreover, a power of attorney can be activated either immediately or under specific circumstances.
In contrast, guardianships are established by the Court and are primarily relevant when an individual has reached a state of mental incapacity where he or she cannot make decisions for himself or herself and does not have a power of attorney.
To become a guardian of property for someone, one must undergo a process through either the Office of Public Guardian and Trustee or the Ontario Superior Court of Justice. Once appointed, a guardian of property gains the authority to:
- Manage bank accounts
- Handle pensions and other sources of income
- Apply for benefits or supplementary income
- Pay bills
- Make purchases for goods and services
- File tax returns
On the other hand, a guardian of the person can make decisions related to personal care, including healthcare, nutrition, shelter, clothing, hygiene, and safety. They are expected to explain their role to the incapacitated person and encourage them to participate in decision-making when possible.
However, there are several drawbacks to having a guardianship in place:
1. The individual in question cannot choose their guardian; this decision remains with the Court
2. The appointed guardian may be overly protective, potentially limiting the individual’s freedom
3. Conflicts may arise between the guardian and the incapacitated person’s loved ones and friends, making it challenging for them to maintain relationships. While it is possible to request a different guardian, the process is lengthy and costly
4. The court appointment of a guardian can take many months to finalize and is very expensive, because it consists of legal fees, capacity assessment fees and other disbursements
To avoid the disadvantages of having the court appoint a guardian, it is advisable to consult with a lawyer to have powers of attorney prepared. This approach is cost-effective, flexible, and can be tailored to individual preferences. If you have any questions regarding powers of attorney or guardianships, please feel free to reach out, as I am here to assist you.
PLEASE NOTE THAT THE CONTENT OF THIS BLOG IS MERELY FOR INFORMATION PURPOSES AND DOES NOT CONSTITUTE LEGAL ADVICE.
