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Sunday, July 28, 2013

Does the adult guardianship order allow the guardian to act as executor?

A reader wrote to me to ask why the guardianship order that was put into place while her mother was alive does not allow anyone to deal with her mother's estate. I find it upsetting that so many people appointed under adult guardianship laws believe themselves to have the authority to give away or sell the person's assets. Even though guardianship orders clearly state what the guardian can do, people still manage to add in all kinds of other powers that are unlawful.

In this case, it sounds as if everyone was acting with the best of intentions and simply didn't understand the law or the legal documents. Here is her question, followed by my response:

"My mother suffered a massive stroke and dementia was the result. Our family consulted a lawyer and legal guardianship was given to my sister. This guardianship included mom’s health care as well as managing her finances and disposing of her assets. When we discussed what we needed with the lawyer, he was to ensure that the guardianship would extend beyond mom’s death as she did not have the mental capacity to prepare a will. Well, mom is gone now and there is no will. The bank will not recognize the Guardianship and has closed mom’s bank account and set up an Estate account. My sister no longer has access to the account. How do we deal with the account?"
An adult guardianship is set up to allow someone to make decisions on behalf of a person who can no longer do that for herself, and it appears that the guardianship functioned properly while your mother was alive.
I would like to say though that a guardianship order is not about, as  you say "disposing of assets" but is about the running of financial affairs in a way that best suits the needs of the person who is being looked after. No assets should be given away to anyone. Nor should they be sold unless this is the best way to look after the dependent person, and the money is invested for the dependent person. A guardianship is not a will and does not allow a person to act as an executor. I certainly hope that your sister held onto all of your mother's assets while your mother was alive, as she did not have a legal right to dispose of them.
It isn't possible to create a guardianship that would extend beyond a person's death. The bank is correct in refusing to recognize the guardianship, as it expired as soon as your mother passed away. Your sister doesn't have access to the account because she is neither an executor nor a court-appointed administrator.
The reason for this is that you can't write a will for someone else. A will is recognized as being a unique combination of wishes, intentions, and knowledge that nobody else could possibly have other than the person whose will it is. Our laws in Canada say that when a person dies without having made a valid will, nobody else can decide what the will would have said. Even a judge in a courtroom will not make up a will for someone else.
Where someone has died leaving no valid will, her estate must be divided up according to the intestacy laws of your province or territory. Normally this would mean that someone has to be appointed by the court as an estate administrator. That could be your sister or someone else. If the amount in the estate is small and consists only of a bank account, the bank might be willing to proceed by way of having all beneficiaries sign an indemnity rather than go through the expense of getting Letters of Administration from the courts.

2 comments:

  1. If someone file an application for guardianship over their mother, and listed me as a respondent, and requested that my mother's bank accounts be frozen until she completes a capacity assessment.
    How would the mother get her accounts unfrozen after she completes the capacity assessment?
    Is there anything she can do in court?

    ReplyDelete
    Replies
    1. The person filing for guardianship doesn't have the legal authority to freeze your mother's bank account. You must mean that the request is part of what is being asked of the court. The point of having the account frozen is to prevent your mother from losing money because of mistakes, or perhaps because of influence by other people.

      If the capacity assessment shows that your mother doesn't have capacity to deal with financial affairs, the judge will most likely grant an order for guardianship or trusteeship to the person who is applying. In that case, your mother will no longer be in charge of her accounts, and it will be up to the guardian to deal with them.

      If the capacity assessment shows that your mother is capable of handling her own financial affairs, this will be part of the information given to the judge to decide about the guardianship request. This would be a problem for the person applying, who would probably have his or her request for guardianship rejected. At that time, the judge would order that the accounts be unfrozen.

      As you are a respondent, you can be present for anything being said in open court, as can your mother.

      Lynne

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