Managing a loved one’s affairs when they can’t do so themselves is a solemn responsibility.
The emotional weight of making decisions on their behalf and the uncertainty of how to proceed legally can be crushing.
Whether helping someone plan their future or handling an urgent situation, you must familiarize yourself with the tools available to provide the assistance they need.
Two standard legal options in this situation are guardianship and power of attorney (POA). Each offers a way to delegate decision-making authority, but they differ in ways that directly affect the level of control, care, and oversight involved.
You will make better-informed choices and serve your loved one’s unique circumstances with both protection and peace of mind when you understand these concepts.
The Basics: What Is Power of Attorney?
Power of attorney is a legal document that allows a person, called the principal or beneficiary, to designate someone else, known as a power of attorney or agent, to make decisions on their behalf.
These decisions may involve finances, health care, or other areas of life, depending on the scope of the authority granted.
A power of attorney is a flexible tool that the principal controls. People typically use it to plan for times when the principal is unavailable or unable to make decisions due to illness, injury, or absence.
Forms of Power of Attorney
A power of attorney works in several ways, each to fit specific needs:
- General Power of Attorney: This document grants broad authority, allowing the agent to handle most aspects of the principal’s financial and personal affairs.
Examples include managing bank accounts, paying bills, and signing legal documents.
- Limited Power of Attorney: Provides more specific control, often for a limited time or a single task.
For example, someone might use limited power of attorney to authorize another person to sell property on their behalf while they are out of the country.
- Durable Power of Attorney: This type of power of attorney stays in effect even if the principal becomes incapacitated. This is a critical distinction because most powers of attorney automatically end if the principal loses the mental capacity to make decisions.
A durable POA continues beyond that point, making it useful for long-term planning.
- Medical Power of Attorney: This empowers the agent to make healthcare decisions when the principal cannot, including decisions about medical treatments, surgeries, and long-term care options.
Medical POAs are often included in living wills or advanced healthcare directives, allowing the agent to follow the principal’s wishes for medical treatment if the principal becomes incapacitated.
The Basics: What Is Guardianship?
Guardianship differs from power of attorney because it’s a legal relationship a court establishes.
When someone is no longer able to make decisions for themselves due to mental or physical incapacity, the court can appoint a guardian to manage their affairs.
Unlike power of attorney, guardianship removes much of the control from the incapacitated individual (called the ward) and places it in the hands of the guardian.
Guardianship typically becomes necessary when the person needing care has not made prior arrangements, such as creating a power of attorney or when disputes arise over their care.
Types of Guardianship
Guardianship has different categories based on the needs of the individual:
- Guardian of the Person: The guardian is responsible for making decisions about the ward’s personal life, such as medical care, living arrangements, and daily activities.
For example, the guardian might choose where the ward lives or what kind of medical treatment they receive.
- Guardian of the Estate: This guardian manages the ward’s financial affairs, including paying bills, managing investments, and handling property.
This type of guardian acts similarly to an agent under a financial power of attorney but must regularly report to the court about their actions.
- General Guardianship: This is a combination of personal and financial responsibility.
The general guardian oversees all aspects of the ward’s life and makes decisions about their welfare and finances.
Differences Between Power of Attorney and Guardianship
Both power of attorney and guardianship assist individuals who cannot fully manage their affairs, but they differ in meaningful ways.
Understanding these differences helps you choose the right option for your loved one.
1. Control over decision-making
- Power of attorney: The principal voluntarily creates a power of attorney while they are still mentally competent, choosing who acts as their agent and what powers they will have.
The principal can revoke or modify the power of attorney as long as they remain competent.
- Guardianship: The court determines who will serve as guardian and what powers they will have. Once the ward is declared incompetent, the ward has little say in the process.
Guardianship also removes many of the ward’s rights, including their right to make day-to-day decisions.
2. Legal oversight
- Power of attorney: There is no ongoing court involvement with a power of attorney unless a dispute arises. The agent is not required to report to the court, and their actions are guided only by the instructions in the POA document.
- Guardianship: The court actively oversees the guardian’s actions, particularly regarding financial matters. The guardian must often seek court approval before making major decisions and regularly report to the court to show they are acting in the ward’s best interest.
3. When each takes effect
- Power of attorney: Depending on the terms set by the principal, a power of attorney takes effect immediately upon signing or is activated later.
For instance, a springing power of attorney only occurs when the principal becomes incapacitated.
- Guardianship: This legal relationship only starts after a court process where the individual is declared incapacitated. The court appoints a guardian at that point, meaning the ward cannot choose their guardian once the process starts.
4. Mental competence requirement
- Power of attorney: A power of attorney requires the principal to be mentally competent at creation. This means that guardianship may be the only option if someone loses the ability to make decisions without having created a POA.
- Guardianship: This type of arrangement is for legally incapacitated individuals. When established, it does not require mental competence because it assists those who can no longer decide things for themselves.
Making the Right Choice
Deciding between power of attorney and guardianship requires careful thought about the individual’s needs and current state of health.
If the individual is still competent, power of attorney offers a flexible, cost-effective way to plan the rest of their life. Otherwise, guardianship may be the only viable option.
In either case, consulting with an attorney helps you make the right decisions to protect your loved one.
Contact the Legal Team at Robinson & Casey, PLLC For Assitance With Guardianship or Other Issues
Whether you are planning for your own future or a loved one needs your help, you can trust Robinson & Casey, PLLC to explain your options and help you make the best decisions under your unique circumstances.
Call us today at (561) 849-4700 to learn more.
