15 September 2022 / Matthew W. Pomy

5 Frequently Asked Questions about POAs and Guardianships

On the surface, powers of attorney (POA) and guardianships seem almost identical to each other. They are both legal tools and processes that allow someone to make decisions on behalf of another individual. These decisions may include authority over healthcare, estate, and finances. However, the similarities can seemingly end there. 
With over 160 participants having registered and attended our recent webinar, Ask a Pro: Comparing Powers of Attorney and Guardianships, it’s clear that this topic raises a lot of important questions. To help clear up any confusion, we’re providing an overview of the frequently asked questions covered during this interactive session. You can also watch the full episode at the link below. 

1. What is a power of attorney (POA)?

A POA is a document that authorizes a person, also known as an “agent," to make decisions on behalf of another person, known as the “principal” in a legal setting. The document, which can be customized to meet the needs of the scenario and circumstances, allows the agent to act in the best interests of the principal. It provides tremendous peace of mind to individuals, ensuring someone they trust can make certain decisions for them if needed. 
Generally, these documents are not filed with the court systems. However, there are some exceptions, such as real estate transactions or other situations in which you want the agency relationship to be recorded. 

2: What are the different types of POAs?

There are many types of POAs. The most common types include:
  • Durable POA – The agent remains an authority even if the individual becomes incapacitated. (This is one of the most common types of POA arrangements)
  • Financial POA – Gives the agent the ability to handle enumerated financial matters.
  • Healthcare/Medical POA – Gives the agent the ability to make healthcare decisions. 

3: What is a guardianship?

A guardianship is a court-ordered relationship in which one adult, the guardian, is authorized to make decisions for and act on behalf of another adult person, the ward. The type and scope of the guardianship determines what rights and abilities are appointed to the guardian. 
This is a court-appointed position. You have to go through the probate court to be appointed as a guardian and, often, have to go through training to qualify as a guardian. In some cases, a bond may also be required to be posted to ensure that there is no wrongdoing by the guardian.

4: What are the different types of guardianships?

There are a few types of guardianships that were covered during the webinar, including:
  • Limited guardianship – This guardianship delegates only specific decisions to the guardian, such as medical decisions.
  • Guardianship of the person – The guardian is in control of the personal needs of the ward; this includes arrangements for food, clothing, residence, medical care, recreation, education, etc. 
  • Guardianship of the estate – This focuses on mainly financial matters. The guardian is in control of the assets and addresses obligations owed by the ward. 
  • Plenary guardianship – This is the “catch all” guardianship where the guardian has control over all decisions for the ward. 
  • Guardian ad litem – In this type of guardianship, the guardian is appointed for the very specific purpose of representing a minor or someone who is allegedly incompetent during the course of a particular type of litigation. The authority ends when the litigation ends. 

5: How are POAs and guardianships different?

The most significant distinction between a POA and guardianship is how each are created/controlled. With a POA, the adult (or person with special needs) appoints their agents and decides what authority each receives. On the other hand, with a guardianship, a court appoints a guardian when the ward is unable to make responsible decisions. While both give an agent or guardian the legal authority to make decisions, a guardianship offers far less control to the ward.
In many cases, a POA allows the agent to successfully manage financial and medical decisions if the adult becomes incapacitated but allows the person granting the POA to define what authority the agent will have. At times, and when a POA document has not been executed (prior to someone losing capacity), guardianship is a better solution for assisting a loved one with all aspects of their life. For parents who care for adult children with special needs, a guardianship can allow them to easily care for their child and manage financial affairs.
To get all of your probate questions answered, watch the full webinar today. If you have additional questions, please contact attorney Matt Pomy at any time.
This blog is not a solicitation for business and it is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.

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