In Ontario, we operate under a binary system: a person is either capable or incapable of managing their property. While advisors speak of the “grey” zone of capacity, it did not seem to be recognized in our legal framework, at least not until recently.
In the case of D.R. v. A.R., 2026 ONSC 796, the Court declined to appoint a guardian for an elderly widow with moderate cognitive impairment. Instead, it found that she remained capable of making decisions, with assistance, which is different from being incapable. The decision also highlights the critical role professional advisors play in facilitating informed decision-making.
Background
Ms. A.R. and her husband, Mr. R.R., had accumulated a substantial amount of wealth through their family businesses. Although Ms. A.R. served as a director and officer of some of the companies, Mr. R.R. was primarily responsible for managing the family’s business affairs, and she had limited knowledge of the operations and value of those businesses. The couple had five children and a longstanding history of family conflict.
Mr. R.R. had appointed Ms. A.R. as his sole attorney for property. He also named his wife as sole executor, trustee and beneficiary of his estate.
After Mr. R.R. suffered a debilitating stroke in November 2023 and later died in October 2024, concerns emerged regarding Ms. A.R.'s cognitive functioning. While she had executed a number of corporate transactions with legal assistance, she later failed to recall certain decisions, appeared unaware of financial activity occurring through her accounts, and executed transactions that were inconsistent with an earlier family settlement agreement.
Amid significant family conflict and concerns regarding her vulnerability, Ms. A.R.'s attorneys for property commenced proceedings on the Commercial List seeking to invalidate certain transactions. The Court determined that the threshold issue was Ms. A.R.'s capacity, which was referred to the Estates List for determination.