When Should You Use A Power Of Attorney, Or A Guardianship?

When it comes to tools that people can use to avoid a contested estate when they are gone, or to avoid fighting when they are incapacitated, a Power of Attorney can be a valuable tool. But in many ways a Power of Attorney overlaps what a guardianship does. What is the difference between these two?

Using a Power of Attorney

As a general matter, a Power of Attorney is an estate planning tool. That is, it is a document that you draft and decide on. A guardianship is not; a guardianship is something that someone else determines that you need, which is put into place by a court, after a hearing or trial.

A Power of Attorney is just a document that gives, permanently or temporarily, someone else the power to act on your behalf. The person or agent that you give power to (who does not have to be an actual licensed attorney despite the name), can sign for you, manage your affairs, and make decisions for you.

Because you draft the Power of Attorney, you get to say when it comes into effect, how it comes into effect, who the agent is, and what kinds of things the agent can do on your behalf.

The Power of Attorney can even be temporary, such as if you will be out of the country, or incapacitated for a short period of time, and someone else may need to manage your affairs for you.

Guardianships are Much Broader

Unlike a Power of Attorney, with a guardianship, someone else (usually a family member, but it could also be a business or the state) is looking at you and saying that you can no longer manage your own affairs. That person will ask the court to have a guardian appointed for you, even if you disagree.

A guardianship is usually put into place when you cannot manage your own affairs, or when you are a danger to yourself, either physically, or financially. They can also be put into place if the court finds that you cannot protect yourself from others who may seek to take advantage of you.

Unlike with a Power of Attorney, when you are just letting someone else “use” your rights for a period of time, with a  Guardianship, you are losing your rights, or at least, the ability to exercise those rights.

Guardianships can be complete or partial, and can affect your ability to make financial, health, or life decisions for yourself. However, many family members may prefer guardianships, seeing them as the preferred way to protect someone who may have dementia, or who simply may no longer have the capacity to manage his or her own affairs.

Courts may not institute a guardianship if a Power of Attorney would be sufficient to protect the incapacitated person.

Probate or guardianship questions?  The Law Offices of Larry E. Bray  can help with any probate matter. Contact West Palm Beach estate planning lawyer Larry E. Bray today to schedule a consultation.

Sources

betterplaceforests.com/blog/articles/difference-between-power-of-attorney-vs-guardianship

smartasset.com/estate-planning/power-of-attorney-vs-guardianship