The life expectancy for children with cognitive disabilities is growing, and this has serious financial and legal implications for their families as their parents age and die, says Ottawa disabilities and estate planning lawyer Kenneth Pope.
When a cognitive impairment makes the person legally incompetent, a legal guardianship should be set up to deal with financial and personal care matters on their behalf, says Pope, founder and principal of K.C. Pope Law.
On average, baby boomers had between three and five children per family, and one in 10 of those families had a child with a disability, he tells AdvocateDaily.com.
Pope estimates that of the 365,000 adults on the Ontario Disability Support Program, about a third have cognitive disabilities, and half of those are not competent. That’s 60,000 people.
“Yet the level of understanding about the necessity for this legal guardianship tool is very low,” he says.
“The first question people ask me is, 'What is the difference between a power of attorney and legal guardianship?' A power of attorney is an authority granted by someone who is competent to assist them with their own affairs, and can be revoked, while a legal guardianship is a legal representation granted by a court to care for an incompetent person.”
Pope says three factors have made legal guardianship essential:
Registered Disability Savings Plans (RDSPs)
Pope says many people with special needs have RDSPs, and as families and the federal government contribute to them for years, they can easily amount to $300,000 to $400,000.
“This is a substantial asset, and yet at present only the parents can be the account holder,” he says. “So, when the parents pass on, there must be a legal representative to manage the investment funds and the money that will be paid from the RDSP when that day comes.”
Adult-dependent survivors of pensioners who are teachers, municipal employees and hydro workers stand to eventually receive half of the pension of the parent, which could amount to as much as $30,000 every year, Pope says.
“Who will apply for it on behalf of the not-competent child? And who will manage it when it starts to pay $30,000 a year?” he asks.
Applying for benefits
Everyone on ODSP who turns 65 stands to receive Old Age Security and Guaranteed Income Supplements, Pope says, noting these have to be applied for, and the money from those plans will be made payable to the non-competent person.
“Someone has to apply for these benefits, and it can’t be the group home support providers because they are not the legal representative,” he says.
Pope says that doctors and banks often grant parents a rudimentary form of power of attorney, and don’t challenge them when they make decisions on behalf of adult children who are incompetent, but siblings, cousins or friends are not given the same weight.
“The solution to this problem is legal guardianship,” he says.
This is best set up while the parents are still alive, and it should specify which family members or friends will assume the authority to handle the person with a disability’s property once the parents are gone, Pope says
“They must all be appointed together,” he says. “So, if the parents plus two cousins are to be legal guardians, it’s not that you have an order that it’s the parents, and in the alternative, the cousins, they must all be appointed together. But normally the parents take the lead, and once they die, it passes automatically to the cousins.”
Pope says, for incompetent persons with no family, the Public Guardian and Trustee (PGT) steps in as property guardian. Ontario’s PGT, with a staff of 388, manages the finances of about 12,000 legally incapable people, he says.
“It would be possible to create a core of legal guardians who are perhaps community volunteers,” Pope says. “But in most cases, as the child is getting older and parents are still alive, it is entirely likely that the parents, siblings and family friends will become the legal guardians.”