Who is the Public Trustee?
The Public Trustee is appointed by the Alberta Government under the Public Trustee Act. Authority of the Public Trustee is found in the Public Trustee Act and other provincial statutes. The Public Trustee maintains offices in Calgary and Edmonton. The offices are staffed by trust administrators, lawyers, taxation officers, auditors and support staff.
The primary functions of the Public Trustee are to
- protect minors’ property interests;
- act as trustee for people with mental disabilities;
- act in the administration of deceased persons’ estates.
The Public Trustee’s policy is to step only in where it is necessary or appropriate to do so to protect the financial interests of vulnerable Albertans.
How can people with mental disabilities be assisted with managing their finances?
The type of assistance that may be provided to a person with a mental disability will depend on the nature of the disability, the type of property owned and the availability of those prepared to assist the disabled person.
The following are options for assistance:
Enduring Power of Attorney
A person, referred to as a donor, may make an Enduring Power of Attorney, under the Powers of Attorney Act. An Enduring Power of Attorney may
- designate a person, called an attorney to administer the donor’s estate (property, contractual rights, entitlements, etc.) if the donor becomes mentally disabled, or
- be prepared in such a way so that it takes effect immediately and continues to have effect after the person giving the power suffers a loss of capacity.
A donor may designate a family member, friend, or financial institution (or a combination of them) to act as attorney.
The Public Trustee will not act as attorney.
The Enduring Power of Attorney must be executed before the onset of the disabling condition.
Informal Trusteeship
Some people with mental disabilities have no property to manage but require assistance with budgeting money received from various government programs and with payment of monthly expenses. Provincial and federal benefit programs allow an “informal trustee” to be appointed, usually by having the proposed informal trustee sign a form known as an Undertaking. An informal trustee can be appointed to manage the benefits under the following programs - Old Age Security, Canada Pension Plan, Canadian Pension Commission, Veterans Affairs, Assured Income for the Severely Handicapped (AISH), Income Support and Benefits from Human Resources & Employment, and Social Allowance.
Potential informal trustees include family members, friends, landlords and representatives of care facilities. The Public Trustee will not act as informal trustee except under the AISH Benefits Administration Program. Further particulars about this program can be found under the AISH Benefit Administration Program section of the web site.
Formal Trusteeship
When a person with a mental disability has an estate to manage, it may become necessary for a trustee to be appointed under the Dependent Adults Act. The trustee can be an adult residing in Alberta, a trust company or the Public Trustee.
The Court may appoint a trustee for an adult person if the Court is satisfied that the person is unable to make reasonable decisions about their estate and that it would be in the person's best interest to have a trustee.
The Public Trustee will not apply to the Court to be appointed as a person’s trustee or consent to being appointed unless the Public Trustee is satisfied (1) that the person has assets requiring protection and ongoing management and (2) that there is no other person who is willing, able and suitable to act as trustee.
What is the difference between a trustee and a guardian?
A trustee manages the financial affairs of a dependent adult.
A guardian makes personal decisions for the dependent adult, such as decisions about health care, living arrangements, diet and dress, personal associations, licensing, education and training, social activities, employment and non-estate legal concerns. A guardian’s authority is limited to the powers described in the Court Order.
How does the Public Trustee become appointed as trustee under the Dependent Adults Act?
There are three ways the Public Trustee can be appointed as trustee:
- by the Court. The Court must be satisfied that the individual is unable to make reasonable judgments about their estate and that it is in the best interests of that person for a trustee to be appointed.
- if the Court has appointed a trustee who dies, and no alternate trustee has been named, the Public Trustee becomes trustee upon notification of the death.
- a Certificate of Incapacity may be issued for residents of designated psychiatric facilities who are unable to make reasonable judgments about their estates. The issuance of a Certificate of Incapacity results in the appointment of the Public Trustee as their trustee. Only the Public Trustee can be appointed in this manner. A Certificate cannot be issued if a person has executed an Enduring Power of Attorney or if the Court has already appointed a trustee.
How does the Public Trustee manage an estate?
Once appointed, the Public Trustee takes control of a dependent adult’s property, which may include real estate, vehicles, investments and personal property. Arrangements are made to file income tax returns, apply for benefit entitlements, insure property and sell or store unused property. The Public Trustee also receives payments due to the dependent adult from any source, including pensions, disability benefits, dividends, interest payments and rent. Arrangements are made to pay expenses including rent, mortgage payments, maintenance payments, taxes, insurance premiums, loan payments and other lawful claims, to the extent of a dependent adult’s assets.
The Public Trustee does not have any funds to provide as a benefit to clients. The Public Trustee administers assets and sources of income to which the dependent adult is entitled. Any payments made by the Public Trustee to or on behalf of the dependent adult must come out of the dependent adult’s assets or sources of income.
If a client’s income exceeds expenses, the surplus is accumulated by the Public Trustee in a trust account, which generates interest for the client.
By assuming control of a dependent adult’s property, the Public Trustee does not seize or confiscate the assets or sources of income. The Public Trustee manages the property for the benefit of a dependent adult, taking into account the requirements of that person, the needs of any dependants and the nature of claims on the estate.
Does the Public Trustee charge an administration fee for managing a dependent adult’s estate?
Yes. This fee may be reviewed by the Court.
The Public Trustee may also be reimbursed for expenses incurred while managing an estate. Such expenses may include legal fees, court costs, postage, photocopying and travel expenses.
The Public Trustee may also hire professionals and agents to assist with the administration of an estate. Examples include property managers to collect rents, lawyers to conduct estate litigation, appraisers to determine market values of properties, realtors to sell real estate, accountants to provide accounting expertise and auctioneers to dispose of property. The estate is responsible for payment of these services.
Does a trusteeship order cancel a Will made by the dependent adult before the date of the trusteeship order?
No. If a dependent adult has made a valid will, it is not revoked by the appointment of a trustee. This also applies to other arrangements that are intended to take effect on death, such as beneficiary designations under a life insurance policy, pension plan or retirement savings plan.
If the Public Trustee knows that a dependent adult client has made a will, the Public Trustee strives to administer their property in a manner that respects the client’s intentions as expressed in their will.
Can a dependent adult prepare a Will?
Maybe. The criteria for determining whether a person lacks the legal capacity to make a valid will are not identical to the criteria that determine whether they are in need of a trustee to look after their financial affairs. Therefore, a person might have the legal capacity to make a valid will even though a trustee has been appointed to protect their financial interests.
When does the Public Trustee’s authority end?
The Public Trustee will manage a dependent adult’s estate until the Public Trustee is discharged or replaced by a different trustee or the dependent adult dies.
The method for discharging or replacing the Public Trustee will differ depending on whether the Public Trustee acts under a Certificate of Incapacity or Court Order.
Certificate of Incapacity
A Certificate of Incapacity remains in effect until the Court makes a trusteeship order or it is terminated by an order of the Court, an order of the Appeal Panel, or an order signed by two physicians who, after separate examinations, have concluded that the person is able to make reasonable judgments regarding the person’s estate.
If a client recovers and the Certificate is discharged, the Public Trustee accounts to the client and asks the client to sign a Release.
Court Order
If the Public Trustee acts under a Court Order, any interested party may apply to the Court to have the trusteeship terminated.
The dependent adult or the Public Trustee may apply to the Court for the Public Trustee to pass its accounts and seek a discharge from the Court. Once the Public Trustee receives a Release, control of the estate is returned to the former dependent adult.
The Public Trustee may also be replaced as trustee. If the Public Trustee is replaced by another trustee, the Public Trustee accounts to the new trustee and relinquishes control of the estate to the new trustee after a Release has been signed.
What happens when a dependent adult client dies?
The Public Trustee continues to protect assets already under its control until the Court appoints a personal representative of the estate.
Funeral arrangements are made by executors, family or friends. The Public Trustee does not make funeral arrangements. However, the Public Trustee will advance, from the estate, a reasonable sum for funeral expenses. These costs are governed by an agreement between the Alberta Funeral Service Association and the Public Trustee.
To finalize the estate of a deceased dependent adult, it is necessary for someone to apply to the Court to be appointed as personal representative of the estate. The Public Trustee will turn over control of the estate to the personal representative after being provided with a Release or after accounts are reviewed and approved by the Court.
Where may further information be obtained?
You may contact either office of the Public Trustee with general questions about dependent adult estate matters. If you are a long-distance caller within Alberta, you may call toll free by telephoning 310-0000 and then dialling 780-427-2744 (for the Edmonton office) or 403-297-6541 (for the Calgary office).
Additional general information may also be obtained through Dial-A-Law at 1-800-332-1091.
We cannot give legal advice.
Your best source of information about a specific trust not held by the Public Trustee is your lawyer.