Guardianship vs Power of Attorney: What’s the Difference?

In elder law, some of the most commonly used terms among attorneys can be hard to understand for a client. Two of those terms are guardianship and power of attorney. Although similar, the two are very different in a court of law. If you’re looking to start the elder care process, you should be sure to know what exactly you are needing to protect the care of your loved ones.

What is Guardianship?

Guardianship is a legal proceeding/relationship in court in which that court will appoint a guardian to exercise the legal rights (make personal and/or financial decisions) for an incapacitated person, also called a ward. Any and all personal/financial decisions will be approved by the court.

So what exactly does the court mandate an incapacitated person? An incapacitated person is defined as one who lacks the capacity to make rational decisions or manage property on their own, especially regarding health and financial decisions. This person won’t be able to meet their own needs in regards to medical care, shelter, safety or nutrition, without the aid of another person due to age, mental illness, injury, etc.

The appointed guardian is typically someone close to the ward, like a family member or a close friend. Some wards may be deemed inappropriate to handle financial matters by the court, and in this case a separate guardian may be appointed, called a third party guardian.

Guardianship is the best choice for cases that require more court involvement, especially in financial situations where those third party guardians are responsible for gaining permission by the court. Guardianship, is very intertwined with the courts, and will require permission from the court in order for a ward to revoke permission granted to the guardian.

What is Power of Attorney?

Power of Attorney is a legal proceeding in which a document, submitted by a principal, gives an agent the legal power to carry out decisions (powers) on behalf of the principal, either in all circumstances (general powers) or only in specific circumstances (limited powers) should that principal become incapacitated. Should a principal want a an agent to take control of decisions now and after possible incapacitation, it is called durable power of attorney, whereas a springing power of attorney will allow the agent to control the decisions only after the principal should become incapacitated.

Different versions of the power of attorney can be applied, including financial power of attorney, where an agent will make decisions regarding and healthcare power of attorney.

Generally, power of attorney is preferred by those who want to maintain control over who will make their decisions should they become incapacitated, and those who prefer to keep decisions out of the court’s hands. Also, the principal can withdraw a power of attorney as long as they be of sound mind and body to do so.

So which is best for my family?

Since most power of attorney proceedings are done out of court (privately) they tend to be less expensive than guardianship proceedings. However, because of misappropriation of funds in the past by estate agents, some financial institutions may disregard financial power of attorneys.

Should you become incapacitated suddenly, how do you know the person you would like to handle your estate, health decisions, etc. will be in control? With a guardianship, a person may be placed in charge of an estate or health decisions that the ward may not have chosen for him/herself before incapacitation occurred.

Should you be worried about the handling of your property and powers, guardianship offers the added security of necessary approval from the courts. Because of the implementation of checks by the court, guardianship documents are widely accepted and recognized whether in hospital situations or financial situations.

Are you still needing help in deciding which of these options is best for your family? Call the Law Office of Christina Lesher today at (713) 529-5900! We can make sure you’re making the right choice for your future.