Trusteeship


Court Ordered Trusteeship

It may be necessary for a trustee to be appointed by the court - this is sometimes called a Formal Trusteeship - for a person who does not have the capacity to make decisions with respect to financial matters. A trustee can be an individual or a trust company and this trustee is "entrusted" with the authority to manage the incapacitated person's money and property, and make expenditures that are reasonably required for the person's education, support and care.

An application for the appointment of a trustee for the incapacitated person is prepared, made and determined in conformity with the Adult Guardianship and Trusteeship Act regulations, forms and procedures. The Court may appoint a trustee for the incapacitated person only if the Court is satisfied that less intrusive and less restrictive alternative measures, than the appointment of a trustee, would not adequately protect the person's interests in respect of financial matters and that it is in the person's best interest to have a trustee.

The Public Trustee will inquire into an alleged need for a trustee and the court may appoint the Public Trustee to act as trustee if no other person is willing, able and suitable to act.

The Public Trustee also reviews and investigates complaints made against private trustees where appropriate. In cases where an investigation determines that a complaint is founded, and other avenues to resolve the complaint are not appropriate or are unsuccessful, the Public Trustee may apply to replace the private trustee to protect the financial interests of the represented adult.

Being appointed trustee is no small task and people who take on this commitment should be commended for their willingness to help others in time of need.

Tips for newly appointed trustees

1. Copies of the Court Order

As a trustee, you may be asked for proof of your authority to act on behalf of a represented adult. The Court Order is your proof of authority. Institutions like banks and the Land Titles Office require copies of the Order certified by the Clerk of the Court. It is, therefore, a good idea to make several copies of the Order, of which at least two copies are Court certified.

2. Familiarize yourself with the Order and the approved Trusteeship Plan

Subject to any limitations or restrictions set out in the Order, the approved Trusteeship Plan, the Adult Guardianship and Trusteeship Act, and its Regulations, a trustee has the authority to take possession and control of the represented adult's real and personal property (except for real property located outside Alberta), to do anything that the represented adult could have done with respect to financial matters, and to sign all documents and do all things necessary to exercise this authority.

A trustee must comply with the Order and the Trusteeship Plan approved by the Court. It is very imporant, therefore, that trustees familiarize themselves with the Trusteeship Order and the approved Trusteeship Plan. As well, the Order will indicate any requirement to have the Order reviewed by the Court or any requirement for you to present your accounts to the Court for examination and approval.

3. Get to know the Adult Guardianship and Trusteeship Act, its regulations, the Surrogate Rules and relevant sections of the Trustee Act.

The legislation and rules which guide your actions as a trustee can be difficult to understand. When reading legislation, the first section often provides definitions of words you may not be familiar with.

Adult Guardianship and Trusteeship Act

This Act is divided into five parts:

Part 1 (Sections 1-2) deals with principles and definitions

Part 2 deals with Supported and Co-decision-Making, Guardianship and Trusteeship

  • Division 1 (Sections 3-10) Supported Decision-making
  • Division 2 (Sections 11-23) Co-decision-making
  • Division 3 (Sections 24-42) Guardianship
  • Division 4 (Sections 43-72) Trusteeship
  • Division 5 (Sections 73) Foreign Orders
  • Division 6 (Sections 74-79) Protective Measures
  • Division 7 (Sections 80-86) General

Part 3 deals with Specific Decisions and Emergency Health Care

The remainder of the Act deals with issues that are administrative in nature and likely not relevant to your situation.

Trustee Act

Unless a different method is approved in your Trusteeship Plan, a trustee must invest a represented adult's assets in accordance with the prudent investor provisions contained in Sections 2 through 8 of the Trustee Act.

This legislation is available from the under "List Acts" or "List Regulations", or at:

The Queen's Printer:
Edmonton
Main Floor, Park Plaza Building
10611 - 98 Avenue T5K 2P7
Phone: (780) 427-4952
Fax: (780) 452-0688

Your local library may also have copies of this legislation and the Court House libraries throughout the province will have copies.

4. Let people know about your appointment

The Adult Guardianship and Trusteeship Act requires that the same people who were provided with notice of your application must be provided with a copy of the Court Order appointing you as trustee. If your Order was granted on a desk application, the Clerk of the Court will send a copy of the Order to these people. If the Order was granted after a hearing, you are responsible for providing these persons with a copy of the Order.

You should also notify:

  • Financial institutions regarding bank accounts, loans, guaranteed investment certificates, safety deposit boxes, etc.
  • Government departments providing benefits to the represented adult
    • Assured Income for the Severely Handicapped (AISH)
    • Human Resources and Employment (Income Support)
    • Old Age Security (OAS)
    • Canada Pension Plan (CPP)
    • Veterans Affairs
    • Alberta Seniors Benefits
  • Other parties providing benefits
    • Workers' Compensation Board
    • Employment Insurance Commission
    • Private pension sources
    • Private long term disability insurers, etc.
  • The institution or other place of residence in which the represented adult may live
  • All parties providing medical coverage
    • Alberta Health Care
    • Alberta Blue Cross
    • Private medical insurance
  • Municipal taxing authorities
  • Utility companies including cable television and telephone companies
  • Canada Revenue Agency

5. Make Banking Arrangements

Keep your money separate from the represented adult's money. Open a trust account for the represented adult where you can direct income to, and pay bills from, on the represented adult's behalf.

An account which the represented adult can access directly can only be established if it is specifically authorized by the Trusteeship Order.

6. Bookkeeping

You may be required to account for your handling of the represented adult's estate. The requirement to present your accounts to the Court for examination and approval may be part of your Order but could also arise at the request of an interested party or the Court.

You may wish to retain the services of a professional bookkeeper or accountant to assist you in maintaining your accounts or you may wish to maintain them yourself using the regulated forms or some other bookkeeping method. Regardless of how you maintain your books, always keep your receipts and cancelled cheques available and organized, as you may be required to produce them.

7. Compensation and Expenses

In your approved Trusteeship Plan, you specified whether or not you wished to be compensated and, if so, how you wish to be compensated. If you elected to be compensated in accordance with the schedule in the regulations, you may only take compensation when authorized to do so by the Court. A trustee is, however, able to take reimbursement of direct expenses and disbursements made on the represented adult's behalf directly from the represented adult's assets without prior Court approval.

8. Gifts and Donations

A trustee, without prior Court approval, may make gifts and donations on behalf of a represented adult with a total value not exceeding 5% of the represented adult's taxable income for the previous year, if certain conditions are met. First, you can only make gift out of property that is not required for the support of the adult or the adult's dependents as described in section 56(3) of the Act. Second, you can only make a gift if you have reasonable grounds for believing, based on the actions of the represented adult while they had capacity, that the represented adult would make the gift if they still had capacity. Third, in deciding whether to make a gift, you must consider any current wishes expressed by the adult. Fourth, you cannot make a gift to yourself unless the proposed gift was disclosed in your Trusteeship Plan that was approved by the Court.

9. Death of a represented adult

When a represented adult dies, a trustee is required to account to the personal representative of the deceased person's estate. You are only required to account to the Court if the personal representative makes application to have your accounts examined and approved.

Be sure to notify the Clerk of the Court in writing of the date of death of the represented adult.

Publications

Created:
Modified: 2012-11-20
PID: 15487