Who can compel an accounting from an attorney for property or guardian of property?

An attorney for property can wield a large degree of control over the financial affairs of the grantor. Similarly, a guardian of property exercises significant control over the property of an incapable person. If there are concerns about how an attorney or guardian is managing the grantor or incapable person’s property, what can be done about it?

An attorney or guardian can be held accountable for their management of a grantor or incapable person’s property through the process of passing of accounts. A passing of accounts is the formal process of reviewing and obtaining Court approval of the accounts kept by a fiduciary.

Parties who may apply to the Court for an accounting

An attorney or guardian can be compelled by the Court to pass their accounts in certain circumstances. Under section 42 of the Substitute Decisions Act (“SDA”), the following people may apply to compel an accounting from an attorney or guardian:

1. The grantor or incapable person;
2. Any attorney for property or guardian of property;
3. Any attorney for personal care or guardian of the person;
4. A dependant of the grantor or incapable person;
5. The Public Guardian and Trustee;
6. The Children’s Lawyer;
7. A judgment creditor of the grantor or incapable person; and
8. Any other person, with leave of the Court.

“Any other person” could include literally any other person (e.g. a child, relative, or friend of the grantor or incapable person), provided that they satisfy the test for leave established by the Courts. When deciding whether a person should be given leave to demand the attorney or guardian to pass their accounts, the Court applies the following test:

1. The person applying for leave has a genuine interest in the grantor’s welfare; and
2. It is reasonable to believe that a court hearing the application under s. 42(1) of the SDA may order the attorney or guardian to pass his or her accounts.

The Court in Groh v Steele expressed that, “such leave should be granted sparingly. The passing of accounts is a detailed review of the financial affairs of the grantor. As such, it is something that is intrusive, and will reveal private financial information about the grantor.”

Options available to a beneficiary of the grantor or incapable person’s estate

It follows then, that a person who stands to inherit from the estate of the grantor or incapable person after their death is not necessarily entitled to an accounting from the attorney or guardian during the grantor or incapable person’s lifetime. However, that person may be granted standing to seek an accounting from the fiduciary if they can satisfy the test for leave under s.42(4) of the SDA.

A beneficiary of the grantor’s estate may also seek an accounting from the attorney if the attorney is also the estate trustee of the grantor’s estate. The Court in Spar Roofing & Metal Supplies Ltd. V Glynn has clarified that following the grantor’s death, where the attorney and estate trustee are one and the same person, there can be no true accounting as between the attorney and estate trustee. Consequently, beneficiaries of the grantor’s estate may seek leave as “any other person” under s. 42(4), to apply to the court for a passing of the attorney’s accounts for the period the attorney acted prior to the grantor’s death.

When will the Court require an attorney or incapable person to pass their accounts?

However, even where a person has standing to apply as “any other person” under s.42(4), it remains in the discretion of the court to order a passing of accounts under s. 42(1). When determining whether a passing of accounts can be ordered, the court considers the following factors:

1. The extent of the attorney’s involvement in the grantor’s financial affairs, and
2. Whether there is a significant concern in respect of the management of the grantor or incapable person’s affairs that warrants an accounting.

Conclusion

In sum, s.42(4) of the SDA provides a mechanism for a third party to hold an attorney for property or guardian of property accountable for their conduct as a fiduciary. If there is suspected misconduct by the fiduciary, this section offers a path for an interested person to get involved to help protect the grantor or incapable person.

If you suspect that an attorney for property or guardian of property is mismanaging assets or failing to act in the best interest of the individual they act for, you have the option to seek accountability. Family members, beneficiaries, and other interested parties can take legal steps to compel an accounting and ensure transparency. Don’t wait—protect your loved one’s assets by contacting our Estate Litigation Lawyers today.

At Mills & Mills LLP, our lawyers regularly help clients with a wide range of legal matters including business law, real estate law, estate law, employment law, health law, and tax law. For over 140 years, we have earned a reputation amongst our peers and clients for quality of service and breadth of knowledge. Contact us online or at (416) 863-0125. The material provided through the Mills & Mills LLP website is for general information purposes only. It is not intended to provide legal advice or opinions of any kind.