Critter Corner: Power of Attorney vs. Guardianship

Dear Angel,

My brother is a spend-thrift and a recovering alcoholic. I want to do something before he blows through all of his savings. I was doing some research, and noticed my options included “Power of Attorney” or “Guardianship.” What is the difference between the two?

Thanks for your help!

Wanda Protectum
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Dear Wanda,

Thanks for your question. Power of Attorney and Guardianship perform similar functions.  However, they are vastly different in terms of how someone is appointed, who does the appointing, and how much control the appointed agent or guardian has.

Guardianship is a legal relationship in which the court authorizes one person with the power to make personal and/or financial decisions for another person. The person authorized with decision-making power is known as the guardian and the person for whom the decisions are being made is known as the ward. Guardianship over the person typically goes along with Conservatorship over property, which in some states is called Guardianship over Property.

Guardianship and Conservatorship is assigned when a person has been determined to lack the capacity to make rational and intelligent decisions on their own in regard to their medical decisions and/or finances. Usually it is a family member who applies for Guardianship and Conservatorship, but it can also be a friend, or in some cases the County or City in which the ward resided. In some cases, a third party may be appointed as Guardian and/or Conservator, particularly in the case of finances, if no one close to the ward is deemed appropriate. Conservators are subject the nightmare of “living probate,” meaning that, among other things, they must file annual accountings every year with the Probate Court or Commissioner of Accounts.

A Power of Attorney is a legal document created by one person, known as the principal, to give another person, known as the agent, legal power to act on behalf of the principal. The document can grant either broad and unlimited powers or limited powers to act in specific circumstances or over specific types of decisions. Typically a Power of Attorney is effective immediately, but is intended to be used only when necessary at some future date.

In most cases, Power of Attorney is greatly preferred to Guardianship because:

• Unlike a Power of Attorney, a Guardianship cannot be created voluntarily; it is granted by a judge;
• The principal retains more control over who makes the decisions and what decisions they can make;
• Power of Attorney has significantly lower costs compared to applying for guardianship (court costs are usually paid for out of the ward’s estate);
• No court is involved;
• No annual accountings are required to be filed;
• More privacy (probate court proceedings are public record);
• The principal may revoke the Power of Attorney at any time so long as the principal has the mental capacity to do so, whereas a Guardianship and Conservatorship can only be revoked by the court.

To discuss your specific situation, please make an appointment with Mr. Farr for a no-cost initial consultation.

Wishing you the best,

Angel