In my previous blog, I ended the blog with a suggestion that as the population ages, I anticipate the courts will be confronted with more cases of capacity determination in seniors with mild cognitive impairment (MCI), and it will be interesting to see to what extent MCI becomes a diagnosis accepted of causing mental incapacity or not.
As a reminder, MCI is not listed as a diagnostic entity in the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition (DSM-5) but rather is replaced with mild neurocognitive disorder (NCD); defined as a noticeable decrement in cognitive functioning that goes beyond normal changes seen in aging.
The Ontario Substitute Decisions Act (SDA) appears to distinguish an all or nothing outcome to manage property – either capacity or incapacity. However, incapacity to manage property is not defined by a lack of independence in managing property. The court in Koch (Re) 1997 CanLII 12138 (ON SC) has emphasized that under the SDA, the ability to act independently on decisions is not a determinative factor to be considered in assessing capacity. In Koch (Re) the court stated that “capacity exists if the person is able to carry out her decisions with the help of others.”
In Ontario, an alternate approach to declamailto:https://www.canlii.org/en/on/onsc/doc/1997/1997canlii12138/1997canlii12138.htmlrations of incapacity resulting in statutory guardianship of property by the Office of the Public Guardian and Trustee, or a court appointed guardian of property for persons with MCI is the remedy that a person with MCI may be capable to appoint a continuing power of attorney for property. Capacity to manage property may remain intact with supported assistance from the named attorney(s) for property to then both plan and/or carry out decisions.
This remedy is demonstrated in D.R. v. A.R., 2026 ONSC 796, where the court concluded that an elderly woman with MCI could exercise her option to execute a new power of attorney from which she would have the supportive assistance “she needs to make, plan, and carry out legal and financial decisions. At the same time, her right to self-determination, her autonomy, and her decision-making rights will have been respected.” Accordingly, Justice Dietrich did not need to find her incapable of managing her property, and did not need to appoint a guardian of property to act on her behalf.
The Ontario Superior Court decisions in Re Koch and D.R. v. A.R. are aligned with supported decision-making which allows individuals with disabilities and/or disorders (such as mild NCD) to make choices about their own lives with support from individuals they choose. Although not formally recognized in legislation in Ontario, supportive decision-making is recognized in some form or another in several other Canadian jurisdictions.
Supported decision-making is an alternative to substitute decision-making that promotes autonomy and dignity. Instead of having a substitute decision-maker (such as a guardian or attorney for property) make a decision for the person with the disability/disorder, supported decision-making allows the vulnerable person to make their own decisions.
A trusted network of supporter(s) can field questions and review options to help the person with the disability make their own decisions. Supporters are selected by the person with the disability. They can be family members, co-workers, friends, and past or present providers, and do not need to be formerly appointed attorneys for property. The individual should select supporters who know and respect their capable wishes and preferences, and who will honour the choices and decisions the individual makes.
The obvious concerns with supported decision-making for management of property is 1) the potential for undue influence where a supporter uses their role to exploit the trust, dependency, and fears of the vulnerable person in order to gain control of that person’s decision-making resulting in financial exploitation, and 2) the potential for supporting the vulnerable person to make decisions after losing capacity resulting in financial harm to the person or others.
I suggest that although a standardized means to determine capacity for supportive decision-making remains to be determined, a suggested essential means to distinguish incapacity versus capacity with supportive decision-making to plan and/or carry out decisions, is that in capable cases, the vulnerable person is expected to independently identify the need for support. That was indeed the case as described in D.R. v. A.R.
As a money manager dealing with people’s wealth, usually handling 100% of their wealth, it is important to be able to distinguish when someone has capacity to be able to assist them with their requests as I’ve seen more cases in the last few years than in the rest of my two decades in the industry.
Where is the line drawn and if its not all or nothing, how will professional be able to decide whether a simple transaction request is within the realm of the clients understanding and considered to have capacity in this regard. Perhaps they can request from us to make a small withdrawal, but may lack the capacity to setup a trust structure and transfer large sums of money to this trust.
Hopefully some part of this can be standardized or more clarity provided to professionals by law makers.
I agree. That is why Capacity Clinic has developed an electronic screening tool to detect risks of incapacity, as well as software to assist professionals to standardize assessments of decision-making capacity to be available soon for public/professional use.