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.
Issue Before the Court and Analysis
The central question before the Court was whether a guardian for property should be appointed for Ms. A.R.
The Court’s analysis was guided by s.22(3) of the Substitute Decisions Act, 1992, S.O. 1992, c.30 (“SDA”), which provides that a Court cannot appoint a guardian where an alternative and less restrictive means exists to meet the person’s decision-making needs.
The Court considered three separate capacity assessments addressing different questions, namely whether Ms. A.R. was capable of managing her property, retaining and instructing counsel, and granting and revoking a power of attorney for property.
Although nuanced, the assessments revealed several common findings. Ms. A.R. suffered from moderate cognitive impairment, was vulnerable to undue influence and financial abuse, and did not consistently recall the nature and value of her assets without prompting. At the same time, she demonstrated insight into her limitations, understood the role of legal and financial advisors, understood the nature and effect of a power of attorney, and was capable of processing and applying relevant information when provided with appropriate assistance.
The Court emphasized the need to balance the protection of vulnerable individuals with the preservation of their right to self-determination and personal autonomy, and therefore declined to appoint a guardian.
Applying s.22(3) of the SDA, the Court found that an alternative and less restrictive course of action was available. Because Ms. A.R. was capable of granting and revoking a power of attorney and of retaining and instructing legal counsel, she could obtain the assistance necessary to understand, evaluate, and apply information when making decisions regarding her property. Therefore, it was not necessary to appoint a guardian and Ms. A.R.’s autonomy could be preserved.
Take-aways for Legal Counsel
This case serves as an important reminder that clinical findings of cognitive impairment are not determinative of an individual's capacity to manage property. Furthermore, an inability to recall the nature and value of one's assets may itself be contextual. In Ms. A.R.'s case, she had historically relied on her husband to manage the family's financial affairs. Likewise, her ability to process and apply information appeared to fluctuate depending on her circumstances. While she struggled in the immediate aftermath of her husband's illness and death, she demonstrated greater capacity at other times. The assessment of capacity therefore requires consideration of the whole person and the totality of their circumstances.
The case also underscores a principle that can be overlooked: requiring assistance is not synonymous with incapacity. Before concluding that a person is incapable of managing property, meaningful efforts should be made to determine whether they can understand, retain, and apply relevant information with appropriate support. This case shows that the law's commitment to autonomy requires nothing less.
Several Canadian jurisdictions have formally recognized this "grey zone" between full independence and substituted decision-making through supported or assisted decision-making models. In New Brunswick, for example, an individual may appoint a decision-making assistant, or have a decision-making supporter appointed, whose role is to help the individual obtain information, understand available options, and communicate decisions.[1] While Ontario has not adopted a comparable legislative framework, this case demonstrates that our SDA already inherently recognizes assisted decision-making.
Perhaps the most challenging aspect of this case is the nature of the support that was required. The decisions facing Ms. A.R. were complex, involved significant wealth and family conflict, and arose in circumstances where she was found to be highly vulnerable to undue influence and financial abuse. In these conditions, the necessary support appeared to lie primarily in the assistance of trusted professional advisors.
For lawyers, this presents both an important responsibility and a difficult challenge. Our role is to help clients understand the information relevant to the decision, appreciate its consequences, and apply that information to their own circumstances. Doing so requires patience, careful listening, and often considerable creativity in simplifying and explaining complex concepts. It also requires resisting the temptation to equate vulnerability, confusion, or the need for assistance with incapacity.
The reality, however, is that neither the legal system nor commercial life is particularly patient. Transactions must be completed, disputes resolved, and decisions made. Lawyers are therefore often left navigating the uncomfortable space between protecting vulnerable clients, respecting their autonomy and getting the work done within reasonable time.
Ultimately, the decision is a useful reminder of the critical role lawyers play in preserving client autonomy. Our task is not merely to identify incapacity where it exists, but to make every reasonable effort to enable clients to make their own decisions whenever possible. That work takes time, patience, and skill, and creating the conditions in which clients of varying cognitive abilities can meaningfully participate in decisions affecting their lives and property.
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