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Friday, September 10, 2010

What does it mean if a Guardian or Trustee for a parent is in a conflict of interest?

The laws governing guardianship and trusteeship of aging parents are provincially made, and vary across the country. Many of them state that a person who wants to be a guardian and/or trustee for another person must not be in a position of conflict with that person. Even where this is not specifically stated in the law, conflict situations can create legal issues and should be avoided.

Being in a position of conflict means that there is something about you or your relationship to the assisted person that could mean that now or at some time in the future, you might have to choose between your duty to the assisted person and your own best interests.

A person in a conflict position is not a good choice as guardian or trustee because it is only human nature to look out for your own interests, whereas the assisted adult needs and deserves someone who will wholeheartedly look out for him or her.

It's important to understand that being in a conflict of interest doesn't necessarily mean that there is a problem existing right now. A person could have no issues at all with the assisted adult right now, but still be in a conflict position if there is potential for conflict in the future. For example: A man owns a farm which he intends to leave equally to all three of his children when he dies. The man has a son who wants to own the farm himself, and who has asked his father a number of times to sell the farm to him. Even though the father and son may get along well otherwise, the son could be in a conflict position in the future if he is made his father's trustee and has to decide whether or not to sell the farm. The conflict arises because the son will have to decide between what his father wants and what he wants.

Some relationships, by their very nature, may put the person in a conflict of interest. For example, a person whose livelihood is earned by providing personal care for a fee should probably not be the one who decides whether the assisted adult should have that kind of personal care. A business partner of the assisted adult may also be in a conflict of interest because if he or she has to choose what is best for the assisted adult, this may not be what is good for the business.

Some relationships are specifically mentioned in the law as NOT automatically giving rise to a conflict of interest. For example, simply being a family member of the assisted adult does not automatically mean that you are in a conflict position. It is possible, of course, for a family member to be in a conflict position but the family relationship alone is not enough to cause it.  For example, a woman might have lent her son $50,000 expecting him to pay it back when he is able to. Just the fact that he is her son doesn't put him in a conflict position should he become trustee. However, the fact that he owes her a significant amount of money is a potential conflict. His best interest (not repaying the money) would be in direct conflict with her best interest (repaying the money).

If your family is thinking about who would be a good guardian or trustee for your parent, you should think carefully about how your life and that of your siblings interconnects with your parent's life to determine whether someone's personal interests could create a conflict.

(This post is excerpted from my book, Protect Your Elderly Parents)

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