A Solution for the Legal Capacity Barrier

Under current legislation and practices an adult, who is deemed not to have contractual competence by a financial institution, faces significant barriers in opening an RDSP outside of British Columbia.

As an adult opening an RDSP, either the adult (beneficiary) or a legally authorized representative must act as the holder.  If the adult is not permitted to be the holder as a consequence of their capacity, then they will probably also not be able to appoint a Power of Attorney to represent them.  Excepting in BC, where they are able to appoint a financial representative with a Representation Agreement (See Nidus for more information), a legally authorized representative must be appointed using some type of adult guardianship.

Guardianship generally requires that evidence be provided, usually to a court, that a person is not competent to manage their financial affairs.  The court finds them incapable and appoints another person to manage their financial affairs.  The process usually requires the support of a lawyer and involves court costs.  Sometimes there is an additional cost of monitoring by the provincial Public Guardian and Trustee.  Individuals and families have turned away from this process in droves and now stand on the sideline without RDSPs.

The RDSP Resource Centre is working with the Canadian Association for Community Living, Planned Lifetime Advocacy Network and Pooran Law to develop a solution.

The solution that we are proposing involves the creation of a federal government mechanism that will result in the appointment of a “qualifying person” who is legally authorized to act as a joint holder of a person’s RDSP.  The form must be completed by the beneficiary and qualifying person.  The form will have three parts and will be used in one of two ways:

1. An adult (beneficiary) completes part of the form, no matter their legal capacity, and legally authorizes one or two “qualifying people” to act as joint account holder for their RDSP.  The “qualifying people” complete another part agreeing to act as a “decision-making supporter”, if at all possible, and where not possible, to make decisions that have the best possible outcomes for the beneficiary.  In other words, assuming fiduciary responsibility.

2. Where the adult is not able to provide direction, a related person or person in a trusting relationship with the beneficiary, may become legally authorized to act as joint holder for the beneficiary’s RDSP by completing the form.  A third party must attest to the relationship. As above the “qualifying persons” must agree to act as a “decision-making supporter” if at all possible and where not possible to make decisions that have the best possible outcomes for the beneficiary.

We are attempting to remain consistent with a set of principles in the development of the solution:

• Easy access to a solution that is consistent across all provincial jurisdictions
• Equal access to the solution with the stigma associated with a capacity test
• Protection of the assets of people who might be vulnerable to unscrupulous people
• Enabling decision-making supporters rather than substitute decision-makers
• Not creating administrative burdens on the individual, financial institutions or governments
• Easy and quick to implement
• Consistency with Article 12 (equal recognition before the law) of the United Nations Convention on the Rights of Persons with Disabilities

We are consulting with stakeholders, including financial institutions, Public Guardians and Trustees, individuals and others.  If you have thoughts on this matter, feel free to leave a suggestion, question or comment.