Overview of Adult Guardianship and Incapacity (15:III)
Capacity or incapacity relate to the effect of mental disability, illness, or impairment on a person’s capacity to create or enter into legal relations. A person’s capacity to make a legally binding decision depends on the type of decision at hand. The various legal capacity standards for carrying out transactions, entering into relationships, or managing a person’s affairs, are set out in different legal sources — some are created by statute and others find their expression in court decisions. The various common law capacity standards are discussed in great length in the upcoming BC Law Institute’s Report on the Common Law Tests of Incapacity, which covers capacity to do the following:
- make a will;
- make an inter vivos gift;
- make a beneficiary designation;
- nominate a committee;
- enter into a contract;
- retain legal counsel;
- form the intention to live separate and apart from a spouse; and
- enter into an unmarried spousal relationship.
What follows is an overview of the interplay of incapacity with various legal decisions and responsibilities.
A. Guardianship and Committeeship
When an individual is mentally incapable of managing his or her affairs, it is possible for someone else to be legally enabled to manage the individual’s affairs or to make decisions about his or her personal care. This can be done through a court order (outlined in the PAA).
A court may appoint a person or the Public Guardian and Trustee of BC to be a “Committee (pronounced caw-mi-TAY, with emphasis on the end of the word.). Consult Re Matthews, 2013 BCSC 1045, for an example of where the court had to choose between two people as to who to appoint as committee. See section VII: Guardianship and Committeeship.
The Public Guardian and Trustee of BC can also be appointed as “statutory property guardian” to manage that individual’s financial affairs (outlined in the AGA).
B. Marriage and Guardianship of Children
A person entering into a marriage contract must have the mental capacity to understand the nature of the contract and the duties and responsibilities it creates. Mental disability may be grounds for annulment if, at the time of the marriage, the mentally disabled person did not understand the nature and consequences of marriage (e.g. that a partner can marry only one person, has a financial obligation to that person and marriage can only end by death or divorce).
To proceed with a divorce, a person must have the capacity to form the intention to “live separate and apart”. For more information, refer to Chapter 3 (Family Law) of this manual.
The new Family Law Act, SBC 2011, c 25, came into force March 18, 2013. Under section 55 of this act, a child’s guardian who is facing permanent mental incapacity may appoint a person to be the child’s guardian in addition to the appointing guardian. As per section 55(4), in carrying out his or her parental responsibilities, a guardian appointed under s 55 must consult with the appointing guardian to the fullest possible extent regarding the care and upbringing of the child. The guardian appointed under s 55 continues as the child’s guardian on the death of the appointing guardian unless the appointing guardian revokes to appointment while still capable, or the appointment conditions provide otherwise (s 55(5)).
In addition, s 51(1) provides generally that a court may appoint a person as a child’s guardian if there is sufficient evidence that it is in the best interests of the child.
C. Capacity to Make a Contract
To enter into a contract, a person must have the mental capacity to understand both the nature of the contract and its effect on his or her interests. If a contractor is unaware that the contractee has an impairment or illness that impacts capacity, the contract may be enforceable against the contractee and/or the committee. Some cases indicate, however, that even if the contractor had no notice of the contractee’s incapacity, the contract may still be set aside as “unfair”. If the contractor knows or a reasonable person would have known that the contractee was mentally ill, the contract is voidable.
D. Drafting a Will
Section 36(1) of the Wills, Estates and Succession Act [WESA] provides that “[a] person who is 16 years of age or older and who is mentally capable of doing so may make a will.” However, the capacity necessary to draft a will is not set out in the Act, but has been developed through common law.
To possess testamentary capacity an individual must be of “sound mind, memory and understanding” (Banks v Goodfellow (1870), LR 5 QB 549 at 560 (Eng CA), a testator must be capable of understanding the following at the time the will is created, both at the time of providing instructions and executing the will:
- the nature and effect of making a will;
- the extent of the testator’s property that may be disposed by a will;
- the persons who are to receive the property under the will, and the moral claims of persons (such as family members and others who are close to the testator) who should receive a share of that property; and
- the way in which the assets are to be distributed under the will.
For more information, please refer to the Making and Executing a Will section in Chapter 16 (Wills and Estates) of this manual.
There is no statutory authority specifically declaring that a person with a developmental disability or cognitive impairment cannot draft a will. However, it is advised that a mentally disabled person have a written doctor’s opinion confirming his or her capacity to draft a will. The appointment of a committee prior to the testator having made the will in question does not in itself demonstrate incapacity to make a will, though there is a much heavier burden on the person making the will to prove testamentary capacity under such circumstances.
E. Capacity to Retain and Instruct Counsel
The test of capacity to retain legal counsel lacks a defining court case. Capacity is presumed unless circumstances indicate otherwise, and the capacity to retain (and instruct) legal counsel is strongly linked to the matter for which the legal counsel is being retained. Law students may wish to consider the standards for dealing with individuals with diminished capacity set out in the Code of Professional Conduct for British Columbia.
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