We receive calls every week from families caring for a loved one whose health is starting to deteriorate, asking about getting a Power of Attorney. Sadly, far too often in the case of those suffering from Alzheimer’s or dementia, most had not done any estate planning documents prior to their worsening condition and by this point may have lost all capacity to sign legal documents! What can be done in instances where no estate planning was put in place ahead of time? The answer is often a guardianship.
By definition of the law, a guardianship is a legal relationship in which an entity or a person is named in a will or is appointed by the court to make decisions for another. One example would be in the case of minors and adults who have become incapable of taking care of their personal needs and can no longer make decisions on their own.
It is also referred to as a conservatorship on occasion, but the term “guardianship” is more frequently used. In the case of minors, the guardianship will apply until he or she is 18 years old. Any family member or close family friend can petition the court for guardianship or a government agency can petition for it.
This is also true in the case of incompetent adults, but the person or ward can select the person that he wants to be his guardian. The judge will take this into consideration before granting the guardianship. After the guardianship is obtained, the ward cannot revoke the guardianship. However, there are cases wherein temporary guardianship is given which can be terminated after achieving a certain purpose. Guardians make all decisions for and on behalf of their wards but must not benefit from transactions made for his ward.
A guardianship is meant to ensure that a minor or an incapacitated adult receives all the necessary care he needs. Every decision that a guardian makes on behalf of his ward must be for the benefit and well-being of his ward.
A power of attorney, on the other hand, is a written, legal document wherein an individual called “the principal” appoints another individual called “the agent” to act on his behalf; authorizing the agent to make transactions for the principal.
Usually, a power of attorney is made when a principal sees that he is becoming unable to handle some of his affairs. This is usually done when he becomes ill or has been in an accident, or when he goes out of town and there are financial transactions that have to be done in his absence. This type of planning should all be done with an eye towards planning for the future, and avoiding possible incapacity. It is a written agreement between the agent and the principal whose consent is necessary for the power of attorney to take effect. Should the principal see that the power of attorney is no longer needed, he can revoke or terminate it at any time.
The power of attorney documents produced by our firm are two separate documents: Durable (for financial matters) and Healthcare (for medical and health-related matters). A Living Will is typically paired with the Healthcare Power of Attorney to address end-of-life decisions. While these documents are very thorough, the only thing worse than not having a power of attorney is having one, but never actually having that conversation with your agent as to what your actual wishes would be if you were unable to communicate them yourself! You are ideally trying to create the situation where someone is not trying to decide end-of-life decisions for you, but to merely voice what they know you would want in those circumstances! The power of the agent is limited only to the content of the agreement, and should be done based on the client’s own specific needs and situation both now and in the future.
While guardianship requires the guardian to report to the court and other agencies the financial dealings made for the ward to determine where the ward’s money went, a power of attorney does not require the agent to account for every penny that he spent.
The best advice of course, is to plan ahead, as no one knows what the future holds! For those situations where time has run out in regards to planning and estate planning documents are no longer possible, a guardianship is the more expensive and time-consuming route, but is often the only answer. For a general overview of the process check out this link: