We are often asked about the difference between a power of attorney and guardianship, and do you need one if you have the other? Well, the power of attorney, assuming that it’s been done correctly, should be designed to avoid the need of a guardianship.
A guardianship is a court proceeding. Typically, it is an involuntary court proceeding. The ward, that’s the person who is the subject of the guardianship, somebody has come forward and said I believe this person to be legally incompetent and I want myself or someone else to be appointed their guardian to manage their affairs for them. That can be an expensive and uncertain process. The ward, the person being accused or challenged for their competency, has rights because you’re going to put somebody in charge of all their affairs. So, they get an attorney, they get examined and all of that costs money and it takes time.
Now a durable power of attorney, again, if done correctly, usually will avoid the need of any guardianship because the ward, the person who ultimately becomes incompetent before they were incompetent, has specified I want this person to act on my behalf and I grant this person these powers to act on my behalf. And again, if done correctly, most of the time a guardianship will not be necessary for the attorney in fact, the person appointed in the power of attorney, to act for the incompetent person.
They both accomplished the same thing, that is putting someone in place to act for an incompetent person. One, the durable power of attorney is much more cost effective, takes less time because it’s already in place, and the attorney in fact (the person who is going to take charge and act for you) was chosen by you. The other, the guardianship, is expensive. It is also time-consuming because it’s in the courts and it’s uncertain. A judge is going to decide who is going to make those decisions for you, usually without your input, because you are incompetent. And so, while they both put somebody in charge to make decisions for you, the durable power of attorney is a much better avenue for people to pursue and that’s why it’s an important estate planning tool. One of the tools I like to say we put in our tool belt, planning for any circumstance that might arise in the future.