10/12/2014 10:04 EDT | Updated 12/12/2014 05:59 EST

Aging and Mental Capacity Under the Law

As our population ages, issues involving capacity can be expected to become more prevalent in the coming decades. Consequently, being able to identify these issues effectively will become increasingly important in balancing the dual goals of protecting vulnerable people.

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Capacity law in Ontario is built on two core principles.  The first is the goal of maximizing autonomy and self-actualization to the extent possible for everyone, young or old.  The second is the goal of protecting those who are vulnerable by removing from them the authority to make decisions that are beyond their capacity and placing them in the hands of another, selected and guided by the affected individual or by the court.  The interplay of these two goals in the context of aging creates unique challenges. 

Ontario law presumes that people are capable as the default position, unless there is some reason to believe otherwise.  Under section 2 of Ontario's Substitute Decisions Act, 1992, anyone age 16 or older is presumed to be capable of making decisions with respect to his or her own personal care, and anyone age 18 or older is presumed to be capable with respect to property.  With respect to wills, once it has been shown that a will was properly executed after being read over to a testator, the law will assume that he or she had the necessary level of capacity to make that will.  Notably, there is no upper age limit on these presumptions.  They apply to the young and the old alike. 

However, the reality is that conditions affecting mental capacity are more frequent in older members of the population.  Signs of dementia may be present in as many as one in two people over the age of 85, says Laura Tamblyn Watts, senior fellow at the Canadian Centre for Elder Law.  As our population ages, issues involving capacity can be expected to become more prevalent in the coming decades.  Consequently, being able to identify these issues effectively will become increasingly important in balancing the dual goals of protecting vulnerable people while respecting the rights of capable older adults to make their own decisions and to lead their own lives. 

The legal tests for capacity differ depending on the nature of the decision being made.  The test for the capacity to make a will, for example, comes from the classic UK case of Banks v. Goodfellow.  Essentially, to make a will, a person must be able to understand and appreciate the nature and effects of the will, his or assets and liabilities, and the legal or moral claims of potential heirs, as well as being free of any mental disorder or delusion that might influence the will.  The Substitute Decisions Act contains different tests for the capacity to manage one's property, manage one's personal care, or to make powers of attorney for personal care or property.  These different tests recognize that while a person may lack the capacity necessary to make a will, for example, he or she may well be capable of making many other kinds of choices and those choices should be respected socially and legally.  Indeed, most older people are capable of making most kinds of decisions.

We have a natural tendency to assume when a person makes a choice that does not accord with our own values that there must be something wrong with his or her decision making process to have led that person to a different conclusion.  It is important to resist this temptation when evaluating whether a person is capable or not.  Some decisions that appear to an outside observer to be irrationally made by an incapable person may be entirely rational, capable decisions that are simply based on a different set of values.  A decision might just be "outside the box", or based on different personal, family or cultural beliefs.  For example, children may look at slow-growing investments by their parents as signs of poor decision-making or incapacity, but the parents may be looking for stability to support their retirement rather than growth, or may simply be content to enjoy their retirement without fussing over their investments. 

It is important to take steps to plan for a potential loss of capacity by preparing powers of attorney for property and for personal care while healthy.  Where a person is truly facing difficulties with his or her capacity to make a particular choice, he or she can choose a person in advance to help by appointing that person in a power of attorney.  If a person has clearly lost capacity and steps have not been taken to prepare for this situation, it may be necessary to apply to the court to have a person appointed to make decisions on behalf of the affected individual. 

All of us, regardless of age, need help sometimes.  There is no shame in asking a trusted friend or family member to help us make choices that we have trouble making ourselves.  Where a person in your life may appear to be incapable of handling a tough decision, engage with the person.  He or she may have good reasons that you had not considered or may have a unique perspective that should be respected, even if you do not agree.

*Ian Hull and Suzana Popovic-Montag are partners at Hull & Hull LLP, an innovative law firm that practices exclusively in estate, trust and capacity litigation. To watch more Hull & Hull TV episodes, please visit our Hull & Hull TV page.