It is never too late to think about the power of attorney and guardianship for yourself or a loved one. No one likes to think about not being able to manage their lives, but it does happen. If you plan early, you can help yourself and your family. Power of attorney and guardianship documents help avoid stress and additional expenses later.

Finances and Healthcare

People need clarification about how and when to give someone authority over their finances and healthcare. However, it is almost always better to make those decisions when you have the mental capacity to do so.

It is still early to think about a power of attorney if you are younger. It is better to be prepared. If you are unable to make decisions, your spouse or partner will be able to take over. That is not the case, as they will need legal authority to manage your finances and healthcare.

The Basics: Power of Attorney vs. Guardianship

A power of attorney allows you to designate someone to manage your health and financial affairs if and when you become incapacitated. There are different types of power of attorney, and by choosing a power of attorney while you are able, your family will avoid costly and stressful decisions later.

What Is A Guardian

A guardian is a person or entity appointed by the court. Guardians make financial and/or health decisions on behalf of someone who has been incapacitated. Guardianship proceedings can be time-consuming and expensive but may also be necessary.

Purpose: Power of Attorney vs. Guardianship

Both powers of attorney and guardianship are similar in that they each assign someone the responsibility of managing the affairs of someone incapacitated.

The difference is when and how they occur. The duties of each option may be very similar, depending on what the documents state. You can decide who takes care of your affairs with a power of attorney. With guardianship, the court decides.

Purpose of Financial Power of Attorney

With a financial power of attorney, you can designate someone to make decisions about your financial accounts on your behalf, including bills and other related issues.

Financial Power of Attorney can also be a “limited” one or “general” power of attorney.

A limited power of attorney limits the duties and responsibilities.
A general power of attorney gives someone all of the rights and responsibilities you would have.

Financial Power of Attorney can also be current or springing, meaning that a power of attorney can take effect upon its signing or may only take effect when the person becomes incapacitated.

Purpose of Healthcare Power of Attorney

By contrast, creating a healthcare power of attorney appoints someone to make medical, and end-of-life decisions about your care and treatment should you be unable to speak for yourself. If the advance directive does not have a place for end-of-life wishes, ensure you complete a living will.

In a healthcare power of attorney, specific decisions regarding care are detailed in the healthcare power of attorney document before selecting a healthcare proxy. Each state has different documents and requirements.

The other advantage of a healthcare power of attorney is access to medical records and speaking with your loved one’s healthcare providers. Without the healthcare power of attorney or release of information, healthcare providers will not share medical information due to confidentiality laws.

Purpose of Guardianship

The purpose of guardianship is to be able to make decisions on behalf of someone who has been deemed incapacitated by the court, which is different than the power of attorney which you choose. The decision-making authority of a guardian is complete and absolute in that the guardian “stands in the shoes” of the protected person.

A guardian makes decisions that benefit the protected person and remain consistent with that person’s values and desires. In some cases, guardianship is necessary to protect someone from abuse, neglect, or exploitation. Depending on the court directive, a guardian may have decision-making authority over healthcare, finances, or both.

Duties: Power of Attorney vs. Guardianship

The duties of power of attorney and guardianship are similar but significantly different. Much depends upon what the documents state and what authority they give the agent or guardian. In either case, power of attorney or guardianship, you are assuming essential responsibilities for someone who trusts you to manage their affairs and adhere to their wishes.

Power of Attorney Duties

Power of attorney duties can be very limited or very broad. They can take effect immediately or upon incapacity. For example, you can create a power of attorney document that is limited to allowing someone to sign a real estate contract while you are out of town.

Below are the broad duties of a power of attorney for finances and healthcare.

Read the document and make sure you understand what you’re responsibilities. If you need help understanding, you may want to consult an attorney.
Deal with all financial affairs, including paying bills.
Sign legal documents.
Take over and manage all bank accounts and other funds, including retirement accounts.
Complete and file tax returns.
Buy and sell real estate.
Make decisions on housing.
Following the healthcare directives, agree to or deny treatment.
Carry out end-of-life decisions.
Avoid conflicts of interest and act with the highest ethical standards.

Guardianship Duties

The court requires documentation to support a person’s petition for guardianship. This documentation might include a letter from a physician, psychiatrist, or neurologist providing the medical information necessary to support incapacity.

Guardianship duties are detailed in the court “letters,” which specify what you are responsible for as a guardian.

The court has oversight over the guardianship duties. The guardianship could be “limited,” giving you only specific decision-making authority. You may also have jurisdiction over finances, healthcare, or both.

Guardianship and power of attorney duties are very similar. It is how and when they are appointed that is different. Power of attorney documents is established while a person still has the capacity, whereas guardianship can only occur once a person becomes incapacitated.

If the guardianship is limited, make sure you understand what choices you can make and what decisions are the right of the protected person.

Below are some of the responsibilities of a guardian.

Bank and retirement accounts of the one under guardianship.
All assets must be accounted for by doing a complete estate inventory. Most people think of an estate as property and money, but it also applies to personal items.
Pay all bills and settle all debts.
Act in the best interest of the protected person.
Provide for the safety and well-being of the protected person.
Decide on housing arrangements and move the protected person if necessary.
Consent to all medical treatment consistent with the protected person’s values and wishes, if known.
Act with the highest ethical standards and avoid conflicts of interest.
Make yearly reports to the courts on the estate and the protected person’s health. Comply with any other court requirements.

Appointment: Power of Attorney vs. Guardianship

As mentioned earlier, the primary purpose of appointing a power of attorney is to avoid going through guardianship later in the event you become incapacitated. Some healthcare powers of attorney and other power of attorney documents allow you to name a guardian should you need one.

If your loved one is incapacitated, you will not be able to get the power of attorney since they may not be able to sign something or understand what they are signing physically. Under these circumstances, the courts could challenge a power of attorney.

Guardianship should not only be avoided but should be a last resort. Under guardianship, someone’s civil liberties and rights are removed. Guardianship may be the only option if you have not named a power of attorney and you or a family becomes incapacitated.

The court will decide who will be the guardian. It could be a company or someone you would not want in the family. Family conflict and disagreement are not unusual during guardianship proceedings.

How to Appoint a Power of Attorney

You can start the process of appointing a power of attorney at any time, and the sooner, the better.

Meet with an estate planning attorney to use the proper forms and cover everything you need to. Some states have the power of attorney forms available online, so you don’t have to use an attorney.
Decide whether a power of attorney will be revocable, irrevocable, limited, or general.
Decide on whether a power of attorney will be effective immediately or springing.
Pick your agent. Your agent could be your spouse, an adult child, or a friend. Pick an agent carefully since this person will carry out your wishes. Select someone you trust and someone who has agreed to assume this responsibility.

How to Appoint a Guardian

A guardianship may become necessary for someone who becomes incapacitated and has not completed the power of attorney documents. In other cases, a power of attorney document designates who the guardian will be upon incapacity.

Since someone incapacitated cannot legally appoint their guardian (unless done so before in planning documents), someone else must petition the court for guardianship.

Make sure no other recourse or document exists for surrogate decision-making.
Talk with the proposed protected person and other family members about the process. To the extent that you can, get agreement from everyone on the decision to petition for guardianship.
Meet with an attorney to determine the legal process for petitioning the court. An attorney can also sort out any other preexisting legal documents that are in place.
Discuss the possibility of limited guardianship. Seek to give the protected person as much autonomy as possible.
Decide if both healthcare and finances need management.
File a petition with the court for guardianship.
Provide supportive documentation, including a letter of competency from a physician.
Notifying the court hearing date and time is sent to all interested parties, including the proposed protected person.
At the hearing, the judge either grants the guardianship or delays a decision. Delay could be due to objections or inadequate support for guardianship.
If appointed guardian, you are responsible for providing the court healthcare and financial plans for the protected person. This plan is updated yearly.

Power of Attorney vs. Guardianship

The process and duties of a power of attorney and guardian may seem overwhelming. But, once you have your estate and advance planning documents, you can rest more easily.

Designating surrogate decision-makers provides a valuable form of responsibility towards yourself and your family. It can be one of the best decisions you can make to help make the transition to the end of life more manageable for you and your family.