A properly prepared, comprehensive power of attorney can help avoid guardianship, which is an often expensive and unpleasant process. A guardianship is a court-supervised process that protects the interests of an adult who can no longer make decisions for themselves. A guardian is someone (or several people) with the court-designated legal authority to make decisions and act on behalf of another.
Their ward is the adult who needs help with their finances, health care, living arrangements, and daily affairs. This individual may need assistance because of old age or physical or mental limitations. Common reasons for having a guardian of a person include situations where an adult is in a coma or has dementia or developmental delays.
Some guardianships are broader than others. For example, a guardian may only have power over medical decisions, but not living arrangements. And a guardian may only have authority over financial decisions regarding specific investments or property.
Durable Powers of Attorney
Having a guardianship is different from having a durable power of attorney. A durable power of attorney (POA) is a legal document. An adult can partner with an attorney to set it up in case they lose the capacity to make decisions at some point. With a POA, you can choose someone – your “agent” – who would make important decisions for you.
The benefits of having a durable power of attorney as part of your estate plan include the following:
- ensures that someone you trust will be able to make important decisions on your behalf if you ever lose capacity
- gives you peace of mind knowing that your affairs will be handled according to your wishes
- helps avoid the need for a court-appointed guardian, which can be costly and time-consuming
- allows you to maintain control over your future even if you are unable to make decisions for yourself
In contrast, guardians are put in place by court order. They serve to manage the affairs of those who can no longer make their own decisions about health care or finances. Without a durable power of attorney reflecting your wishes, the court must appoint a guardian.
What Does a Guardian Determine?
A guardian of the property guides financial matters, while a guardian of the person manages personal and medical decisions. In less complex circumstances, one person may be in charge of both property and personal or medical decisions. Both types of guardians follow court supervision and are held accountable to that court.
This court supervision acts as a safeguard, preventing mismanagement of property or taking advantage of the ward. The guardian must report the details of their actions to the court on a periodic basis.
Frequently, courts will require the guardian to seek permission before making major decisions. This can include decisions such as terminating life-support or requiring medications, or selling real estate or other property. Additionally, a financial guardian must often post a bond as an insurance policy protecting the ward’s estate from mismanagement.
The Guardian Role
Guardians must serve the ward’s best interests. They must be competent and trustworthy. Yet court proceedings can be time-consuming and expensive. Professional guardians are often pricey, too. By adequately preparing durable powers of attorney before a physical or mental health crisis occurs, you can avoid guardianship.
POAs provide direction for decision-making based on your wishes by the designated agents. Without these documents, the court appoints a guardian who is available to serve. This might be their spouse, adult child, or another family member. In some cases, especially if there is conflict, the court appoints someone off a list who is completely unrelated to you.
A guardian will act until the court issues an order ending this responsibility. This usually follows:
- The ward’s death
- The ward no longer requires this level of assistance
- In the case of financial affairs, all assets are spent
- The guardian can no longer handle the responsibilities or resigns
- The court removes the guardian following a successful legal challenge
Work With an Attorney to Avoid Guardianship
To avoid an unwanted and expensive guardianship, draft your POA while you are young and have all your faculties. Although it’s unpleasant to consider, you never know when your life can change drastically. You can easily establish a durable power of attorney when you execute other estate planning documents, like a health care proxy and last will and testament.
Meet with an estate planning attorney at Kurre Schneps to discuss concerns you may have regarding potential physical or mental illness. They can assist you in choosing the right representative, someone you can trust to make decisions in your best interest. This way, you will have peace of mind knowing that future decisions will reflect your wishes. Likewise, if you are facing issues with a loved one who is no longer of sound mind, our estate planning attorneys can help.
