-Power of attorney and guardianship are commonly used interchangeably. And although they both entail someone acting on behalf of another incapacitated individual, they are not precisely the same.
Who is an Incapacitated Person?
When one is incapacitated, they are either not physically or not mentally fit to deal with life’s affairs. Perhaps the person is underage or ill, so they cannot offer food, shelter, and clothing or manage their financial affairs.
In such a scenario, the person is offered guardianship. The guardian may be a relative or any other qualified person appointedto manage the incapacitated person’s affairs.
Durable Power of Attorney
On the other hand, a durable power of attorney is a legal document that lets an appointed person (attorney-in-fact) take over the principal’s financial matters and decisions. This applies when the principal is not mentally sound or has lost their ability to understand financial issues due to illness or age.
The agent or attorney-in-fact acts on behalf of the principal to sign documents and cheque, open bank accounts, sign tax returns and invest in real estate, to mention a few financial matters.
A power of attorney may be immediate, which is enacted as soon as the parties sign documents. Or, it could be springing, which the principal signs before they lose capacity and becomes enacted later on.
How is an Individual’s Incapacity Established?
You might be wondering what criteria are used to determine a person’s capacity, both for guardianship and power of attorney.
In the case of guardianship, a person is considered incapacitated by the judiciary if they are not fit to manage properties and take care of their essential needs. Unlike in power of attorney, where the principal chooses their agent, in guardianship, the guardian is selected by the judge under guardian proceeding.
Healthcare Surrogate and Power of Attorney
Some states like Florida allows individuals to appoint a healthcare surrogate who can make healthcare decisions for them. Otherwise, a guardian may be assigned to look after the incapacitated person’s healthcare and medical treatments. For instance, suppose a person had not appointed an agent, they suddenly develop a stroke that leaves them paralyzed and unable to speak. In that case, a guardian will be assigned to help make sound healthcare decisions.
The reason being, an incapacitated person is not fit to execute a power of attorney or a health care surrogate, making guardianship the best way forward.
Do You Need a Pre-Need Guardian?
You can appoint a pre-need guardian before you become incapacitated. With this, you get to choose the person you would like to be your guardian if you ever become incapacitated. You may also be specific on the individuals you would never want to serve as your guardian. The idea ensures a smooth transition and saves the judge time and stress of figuring out the best fitting guardian for you.
Get a free power of attorney form for any state and appoint your agent as early as now. This gives you peace of mind knowing that someone has your back in case anything happens.