Heirs and Omissions Bulletin Sep 05, 2019

Published: Thu, 09/05/19

Heirs & Omissions Bulletin

September 05, 2019

Have you lost your marbles?

By Ashley Collins, Associate Cambridge LLP

In many lives there comes a point when a family member or close friend, often elderly, begins to show signs of decline in their cognition or ability to make decisions. These changes prompt a range of questions as to whether or not the individual in question has the capacity to live alone, continue to drive, or make sound decisions about how their money is managed. In many situations family members, service providers and professional advisors disagree about whether a person has the ability to appreciate the nature of the decision in question. As the aging population grows, disputes over a person’s capacity to make certain decisions will become more and more prevalent.

A recent 2019 decision of the Ontario Superior Court of Justice, Adler v Gregor, depicts a power struggle between two siblings trying to utilize capacity assessments against each other in litigation over which of two different power of attorney documents executed by their 90 year old mother was valid. In 2015, Mrs. Adler granted one of her two her children sole power of attorney for property and personal care. These documents were only to be used if a capacity assessor or physician deemed Mrs. Adler to no longer have capacity. In 2017, at the request of the sister who was selected as attorney in 2015, a capacity assessor found Mrs. Adler incapable.

Later that year, Mrs. Adlers’ other daughter took her to a new lawyer to execute new power of attorney documents appointing both siblings as her power of attorney for property and personal care. She also obtained a capacity assessment that stated Mrs. Alder had the legal capacity to make the new power of attorney documents. The first important takeaway here is that the law recognizes that even though a person may be declared incapable of making financial decisions they still may be capable of making a power of attorney for property. In other words, the two tasks require a different level of cognition. That is, managing one's assets requires a higher level of cognitive function than deciding who to select to manage one's assets. Many people, including professional advisors, often are not aware of this construct.

Litigation ensued over which power of attorney was valid and effective. The Court was ultimately asked to determine if the 2017 power of attorney documents executed were valid, amongst other issues. In determining that Mrs. Adler did not have capacity to grant the 2017 power of attorney documents, and they were therefore invalid, the court made key takeaway points about capacity assessments. Both siblings were heavily involved in providing input into the draft reports prepared by their respective capacity assessors; this bias led to the court rejecting both reports and deeming them unreliable.

The presumption of capacity is legally rebuttable but not simply because an individual is elderly or has a diagnosis which may affect their capacity (i.e Alzheimer’s). Each case is assessed on an individual basis, and incapacity concerning a decision must be task and time specific. To determine requisite decisional capacity, an examination of the following criteria is used:

the given set of facts;
the available relevant evidence; and
an application of the applicable statutory[1] and case law.

It is important to note that the relevant criterion employed in assessing whether an individual has the necessary capacity in one situation differs from another. For example, a different approach will be employed to assess if an individual has the capacity to grant a continuing power of attorney for property, versus the capacity necessary to manage one’s personal care. The various capacity assessment requirements can be difficult to navigate, and costly. The implications of a determination of incapacity are significant as it can interrupt an individual's fundamental rights. For these reasons, we recommend contacting an experienced lawyer to guide you on how to procure or a challenge a capacity assessment.

[1] Mental Health Act, the Health Care Consent Act, 1996, the Substitute Decisions Act, 1992, and the Personal Health Information Protection Act, 2004and additional interrelated statutes.

Ashley is an associate in the Estates Litigation Group at Cambridge LLP. She holds a Bachelor of Arts (Hons.) in Sociology and Political Science from McMaster University. Ashley received her Juris Doctorate degree from Queens University Belfast; in addition to completing an exchange at Allard Hall Law School at the University of British Columbia.

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