Law Times

Law TiMes • March 17, 2014 Page 3 www.lawtimesnews.com LCO looking at process to appoint legal representative for RDSP beneficiaries n the midst of its review of capacity, decision-making, and guardian- ship, the Law Commission of Ontario is addressing a specific request relating to the efficacy of Registered Disability Savings Plans. In its lat- est report, it canvasses the adoption of a new streamlined process to allow adults with mental disabilities to obtain legal representation with- out the appointment of a guardian. e hope is that increased use of the scheme will not only assist families in providing stable financial support but will add an effective estate-planning tool to their arsenal. An RDSP is a savings vehicle that holds private contributions and government grants on behalf of those with disabilities. While the poli- cies behind the plan champion self-sufficiency and active involvement in decision-making, the thresholds for capacity required by the Income Tax Act and the Substitute Decisions Act oen put the plan out of reach. ese issues, first identified in the federal government's 2012 budget, spurred a request for the provinces and territories to consider a more streamlined process. e government enacted a temporary process un- der the Income Tax Act to permit select people to act as a plan holder for an adult beneficiary with the idea being that appropriate long-term solutions will be in place when it expires in 2016. Sarah Mason-Case, a research lawyer at the law commission, says that while 70,000 people across Canada have RDSPs, this represents a very low rate of uptake compared to the number of people who are potentially eligible. "Legal representation is one of several issues of access. When someone wishes to open an RDSP, a financial institution could refuse to do so for reasons of legal capacity or adults and their supporters may wish to appoint a representative from the outset." In Ontario, if a financial institution is of the opinion that someone doesn't have capacity to understand and appreciate what the contract will entail or the person wishes to have a legal representative, an individual can grant a power of attorney or apply for a guardian through the courts. "What we heard in our preliminary consultations is that some adults and their supporters have concerns with these existing frameworks," says Mason-Case. Lawyer Mark Berlin, a member of the board of governors of the law commission, says the project is unique because of specific guardianship and capacity issues affecting the maintenance of an individual's indepen- dence. "We have to understand that they may not be operating on the same level as someone who has full capacity but we must not treat them in a childlike manner but with full dignity." Sébastian Desmarais of Tierney Stauffer LLP believes RDSPs are a well-thought-out and much-needed concept. He notes that along with their other merits, RDSPs are an exempt asset under the Ontario Disabil- ity Support Program and a valuable alternative to those receiving ODSP benefits. "e 2012 federal budget allowed for rolling RRSPs into RDSPs tax free. It's a tool for parents to use, particularly aer death, to fund an RDSP. is allows more flexibility in estate planning." He also believes it's wise to add more flexibility to the setup require- ments. "First, you need to qualify for the disability tax credit. e sec- ond question is, 'Do you have capacity to enter into a contract to open an RDSP?' Capacity is always a case-by-case matter. e person may be capable of doing many things but they may not fully understand all the ramifications of signing a contract." Mason-Case gives the example of someone who can pay rent but can't make decisions about complex investments in mutual funds. "It depends on the different decisions at stake. Some adults who want an RDSP do not have guardians and attorneys because they haven't had a need for this kind of formal representation in other financial matters." e problem is that there are different standards of capacity for the various issues at stake. e standard required to open an RDSP is pre- scribed for entering into a contract under the Income Tax Act. If a person doesn't meet that threshold, the next choice would probably be a power of attorney. "While it's a fairly fast process and an adult could stipulate that the attorney only make decisions for the RDSP, some adults with dimin- ished capacity may have difficulty meeting the threshold to appoint one," says Mason-Case. "e threshold to appoint an attorney for property management in Ontario is quite stringent. From what we've heard to date, it is possible NEWS Voting now open! 2014 From March 12 to 31, 2014, Ontario's licensed paralegals will have the opportunity to vote for up to five candidates in the Law Society's 2014 Paralegal Bencher Election. Elected individuals will sit as benchers in Convocation and will be members of the Law Society's Paralegal Standing Committee. The online election site at www.webvotedirect.com/lsuc is a secure website operated by Computershare, the company hired by the Law Society to conduct the election. All eligible voters received voting instructions to access the voting system. To learn more about the candidates and their views, voters are encouraged to check out the Voting Guide, which is available at www.lsuc.on.ca/paralegal-election-2014, and on the Computershare website noted above. www.lsuc.on.ca/paralegal-election-2014 Voting closes at 5 p.m. EDT on March 31, 2014. For assistance with voting or obtaining control numbers, please call Computershare at 1-866-301-2518, or 514-982-8711 (outside Canada/US). LSUC_LT_Mar17_14.indd 1 14-03-11 10:26 AM that it may be out of reach for some adults." ere are also problems with a guardianship order. e law com- mission notes adults and their families have expressed concern that the process to have someone declared legally incapable can be expensive and time-consuming with significant repercussions for a person's well-being, such as restric- tions on autonomy and stigmatiza- tion. It also declares the person in- capable of managing any property. "e purpose of this project is to consider a process to appoint a legal representative for RDSP beneficiaries only. We have heard that the process should be narrow to avoid spillover into other forms of property management," notes Mason-Case. She speculates that in a new model, it could be that legal representatives only have the power to open the account or they could assist in the management of the investment or even with spending the money. "e eventual scope of a legal representative's powers is one significant issue that was brought to our attention." e report lists nine possible options, some involv- ing personal appointment options similar to a power of attorney with a lower threshold and others involv- ing external appointments by a court, administrative tribunal or government agency. "For this project, we have presented a broad range of options that could possibly be fea- sible in Ontario," says Mason-Case. "Generally, personal appoint- ments are seen as preferable be- cause adults can choose who they would like to help them and how. It could be, however, that an external process is workable or even a com- bination of the two." Some of the proposals build on things such as supported decision- making and representative agree- ments. ese are novel concepts in Ontario, although community and advocacy organizations have been pushing for new forms of decision-making for quite some time. "In Ontario, we don't have a legal framework for supported de- cision-making," says Mason-Case. "We hope to hear opinions on whether these options are workable, specifically in the context of RDSPs. A consultation was launched in December 2013, and the [law commission] is also organizing focus groups for adults with mental disabilities and their families, consulting with financial institutions, the provincial government, community and advocacy organiza- tions, and the trusts and estates bar. "It is very important that any new process meet the actual needs of adults with mental disabilities and the other individuals and groups that have an interest in the outcome." LT BY JUDY VAN RHIJN For Law Times I 'The purpose of this project is to consider a process to appoint a legal representa- tive for RDSP beneficiaries only,' says Sarah Mason-Case.

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