Many people want to know the difference between a Durable General Power of Attorney and a Guardianship.
What is a Power of Attorney?
A power of attorney is a legal document where one person (the principal) authorizes another (the agent) to act on his or her behalf. There are powers of attorney for assets which allow your agent to make decisions regarding your property and there are powers of attorney for health care which allow your agent to make decisions regarding your health care needs.
Your power of attorney can be broad in scope, giving your agent the ability to make any and all financial and personal decisions for you (a General Power of Attorney) or you can limit your agent’s authority by specifying the types of decisions you would like your agent to make on your behalf (a Limited Power of Attorney).
You have a choice whether you would like your agent to have the ability to make decisions both now and if you become incapacitated (a Durable Power of Attorney) or your agent can be limited to make decisions only when you become incapacitated (a Springing Power of Attorney). You must have capacity to execute a power of attorney. If you lack capacity to execute a power of attorney, then a guardianship may be necessary.
What is a Guardianship?
Guardianship is a legal relationship where a court gives a person (the guardian) the power to make personal or financial decisions for another (the protected person). A family member, public or professional guardian initiates the proceedings by filing a petition in the proper court. A guardianship over the person gives the guardian the power to make personal decisions for the protected person. A guardianship over the estate gives the guardian the power to make financial decisions for the protected person. Often the court appoints the same person as guardian of the person and guardian of the estate. Appropriate documentation is necessary to establish the need for a guardianship, and the guardian is required to make all the statutory reporting to the court.
A power of attorney is a private way to decide who will have the legal authority to carry out your wishes if you can no longer speak or act for yourself. It is less costly than a guardianship, which is a public proceeding and the person appointed as your guardian may not be the person you would choose.
A power of attorney is limited in its authority to the scope of the document and acts without court supervision. In contrast, a guardian has legal authority as ordered by the court, and is subject to court supervision, which provides oversight but adds substantially to the expense.
It is good to get your planning in place ahead of time to do what you can to avoid guardianship. +