As parents age or loved ones become incapacitated, they may struggle to oversee their personal and financial affairs independently. In estate planning, guardianship and power of attorney are two tools that may come up when deciding how to assist with managing another person’s affairs. While both options provide support, they differ in scope and authority.
Understanding how each function can help with determining the most suitable approach for caring for someone else’s estate.
What is guardianship?
Guardianship is a legal process where the court appoints a guardian to someone who can no longer care for themselves due to mental or physical incapacity. Guardians make decisions about the person’s well-being, including healthcare and living arrangements. It may be temporary or permanent, depending on the situation.
What is power of attorney?
A power of attorney is a legal document that allows one person to make decisions on behalf of another. The authority granted can be broad or limited, depending on the type of power of attorney. It may cover financial matters, healthcare or both. An individual may grant this power while they are still mentally competent and can revoke it at any time.
Key differences between guardianship and power of attorney
Guardianship and power of attorney differ in how they are established and the level of court involvement required. A court process is necessary to appoint a guardian, whereas an individual can create a power of attorney through a legal document.
Moreover, guardianship gives broader control over a person’s care, while power of attorney focuses on specific areas, such as managing finances or making medical decisions.
When to consider each option
Consider guardianship when someone’s incapacity is severe enough that they cannot manage their affairs. This option may be suitable if they have not created a power of attorney or are unable to do so.
On the other hand, the power of attorney may be better for individuals who can and want to retain control over their affairs and wish to avoid court involvement. In either case, consulting an estate planning attorney can help clarify the legal process.
Both guardianship and power of attorney can play important roles in managing another individual’s affairs. Thoroughly assessing the individual’s needs and preferences can assist with determining which estate planning tool may best preserve their well-being and dignity.