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On Guardianship Applications: Be Sure to ‘Plan Ahead’

In its October, 2018 decision in Connolly v. Connolly and PGT[1] the ONSC withheld its approval of a guardianship application which, on its face, appeared to be a slam-dunk-winner. The reason? Incomplete planning submitted by the party applying for guardianship.

In Connolly, Michelle Connolly applied for an order appointing her as the guardian of property for her adult son, Taylor Connolly. Taylor was badly injured in a pedestrian-vehicle-accident in 2003 when he was eight-years-old (he was 23 at the time of this application) and he received net settlement funds in excess of $1,000,000 from the related personal injury litigation (the “Settlement Funds”).

For Taylor’s entire life his mother, Michelle, had been his primary caregiver and support figure. The Court acknowledged that Michelle had devotedly assisted Taylor, both prior to and following the accident, “in every way possible”[2]: from his healthcare needs, to his continued educational endeavors and, importantly, with the daily and long-term management of his finances.

Michelle wanted to continue in this role as the primary support for her son, so she applied under the Substitute Decisions Act, S.O. 1992, c. 30 (the “SDA”) to be appointed as Taylor’s guardian of property and formalize her role as the party responsible for the management of Taylor’s finances, which almost exclusively consisted of the Settlement Funds.

On the basis of a capacity assessment report, the Court accepted that Taylor was indeed incapable of managing his property under s. 6 of the SDA, and he needed a guardian of property. The primary issue remaining for the Court in Connolly was whether Michelle was the appropriate person to fill that role.

Given that Michelle had been providing care and assistance to her son throughout his lifetime, including by managing Taylor’s finances, it would seem at first glance that Michelle would be the ideal person to step in as Taylor’s guardian, and that the Court would readily grant her application. However, the Court balked at appointing Michelle as guardian, because she had failed to provide sufficient evidence in her “Plan” for Taylor’s financial future.

In accordance with s. 70 of the SDA, Michelle’s application materials included a ‘management plan’ for Taylor’s property (the “Plan”). Michelle asked the Court to concurrently approve the Plan and appoint her as guardian of property. However, the Court was unable to grant Michelle’s application because the Plan had evidentiary gaps in it, and did not satisfy the Court that there was a viable financial regime in place for Taylor’s present and future needs.

Pursuant to s. 32 of the SDA, a guardian of property is to act in accordance with the ‘management plan’ that is established for that property. The Connolly decision emphasizes the importance of that management plan when a court appoints a guardian for property because “the court’s supervision of the guardian is premised on the terms of the management plan”[3]. Even though the Court found that Michelle satisfied all three relevant criteria for the appointment of a guardian, as set out in s. 24(5) of the SDA ([1] whether the proposed guardian is acting under a continuing POA; [2] the incapable person’s wishes; and [3] the closeness of the applicant to the incapable person), the Court withheld its approval of Michelle because her management plan lacked sufficiently detailed evidentiary support.

The Plan submitted by Michelle proposed that Taylor’s Settlement Funds would be invested with BMO in a conservative management portfolio that would provide Taylor with a modest annual income. The Court accepted that Taylor did not require significant income at present, because his needs were mostly being met by his mother and by insurers. However, the Court also noted that Taylor’s expenses and personal needs would certainly increase over time, particularly when Michelle was no longer in a position to care for him or provide financial assistance. The Court found that the Plan did not properly account for Taylor’s future expenses, and how they would inevitably change and accelerate over time – particularly when he could no longer rely on his mother for housing or attendant care services.

The Court noted several more inadequacies with Michelle’s proposed Plan.

The Court took issue with the fact that Michelle provided no first-hand evidence directly from BMO, particularly regarding how Taylor’s portfolio would be managed in the future, in the event of negative movement in the stock market or if/when Taylor’s circumstances changed.

Further, the Plan failed to address the issue of the guardian posting security. The PGT strongly recommended that the guardian of property be required to post security in the amount of $0.05 per $1,000 invested. Given the amount of Settlement Funds involved in this case, appropriate security would be approximately $7,000. While the Court appeared open to the idea of that security coming directly from the Settlement Funds, it was concerned that Michelle had failed to address this issue altogether in her application.

The Plan was also found to be lacking because it did not contemplate a succession plan for when Michelle was no longer able to act as guardian. It could reasonably be expected that Taylor would outlive his mother and someone other than Michelle would eventually have to be appointed as Taylor’s guardian of property. The Plan failed to account for this contingency. Michelle did not intend to take any compensation as Taylor’s guardian. However a successor guardian may require compensation, and given the amount of the Settlement Funds, such compensation would be significant and could impact Taylor’s finances. The fact that the possibility of a successor guardian (and their potential compensation) was not addressed or considered in Michelle’s application was another factor that lead the Court to find it deficient.

Despite the fact that Michelle appeared to be the most appropriate party to assume the role of Taylor’s guardian of property, the Court in Connolly adjourned her application because it was “concerned about the viability of the [management] Plan”[4] submitted by the applicant. The Court bemoaned the “minimal evidence” provided, and sent Michelle back to gather additional materials so she could satisfy the Court that the management plan to be put in place for Taylor’s property was sufficient.

The ruling in Connolly serves as a valuable lesson for those applying to be appointed as guardian of property under the SDA to ensure that an extensively detailed management plan accompanies their application. These management plans should account for the incapable party’s anticipated future expenses, needs and financial status, and should also be accompanied by evidence directly from any financial institutions that are to manage the property under the plan. Even if the applicant appears to be the ideal person to be appointed as guardian of property, a court may still withhold its approval of the application if the accompanying management plan is found

[1] 2018 ONSC 5880

[2] Connolly at para. 2

[3] Ibid at para. 16

[4] Ibid at para. 57

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