Financial & Legal Issues — Powers Of Attorney & Guardianship
When it comes to planning for the future, be sure you understand the differences between powers of attorney and guardianship.
POWERS OF ATTORNEY
When you create a power of attorney, it does not mean that you can no longer make decisions about your health care or your finances; it just means that another person can act also. A power of attorney designates someone of your choosing to act on your behalf, and that "identified agent" might manage bill paying, handle a tax audit, or maintain a safe-deposit box. A power of attorney is typically terminated when the person who created the document becomes incompetent or dies, but it can be revoked at any time.
A durable power of attorney is a written authorization that gives someone else (often a relative or close friend) the power to make certain decisions on your behalf when you are unable to make those decisions. This type of power of attorney remains in effect as long as you are incapable of making your own decisions, and the identified agent must follow your wishes.
There are two different types of powers of attorney:
- Power of Attorney for Property: Allows an agent to buy or sell personal property, conduct business or banking, file tax returns, etc., on your behalf
- Power of Attorney for Healthcare: Allows the agent to make all of your healthcare decisions, should you become incapacitated, including: further treatment, matters of hydration/nutrition, and the withholding or withdrawal of life-prolonging treatment or equipment.
Guardianship is similar to a power of attorney with one significant difference: it involves the court in the decision-making process. A guardianship, sometimes called a conservatorship, can be granted over those who are deemed incapable of making their own decisions, their estate or both.
The agent appointed by the court to make these decisions is called the Guardian or Conservator. The appointee is generally a family member but could be a professional guardianship company. In some instances, the Public Guardian's office may be appointed. All other options should be explored before initiating the guardianship process.