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What is the Difference between Guardianship and Power of Attorney?

When an individual reaches an age where it is impossible to think rationally on his or her own, it may be a good idea to seek effective legal personnel to assist in making important decisions on behalf of the individual. The terms “guardianship” and “power of attorney” are two definitions that are very important to know when consulting legal representation. It is crucial to understand the differences in guardianship and power of attorney when making decisions on the individual's behalf.

The Definition of Guardianship

Guardianship is defined as a legal process where there is determination by the Court if an individual has the capacity to make his or her own decisions. If the individual does not have the capacity to make decisions regarding legal matters, then the Court will choose a guardian to make the decisions for the individual.

The individual who may need a guardian to represent him or her may display one or more of the following conditions:

  • An adult with Alzheimer's;
  • An adult suffering from dementia;
  • An adult suffering from another condition associated with old age;
  • An adult over the age of 18 years of age with any intellectual or developmental disabilities; and
  • An adult suffering from a traumatic brain injury.

The Definition of Power of Attorney

A Power of Attorney is defined as a written document that delegates the authority to make certain decisions on behalf of the incapacitated individual. Attorneys-in-fact are attorneys who serve as a power of attorney for the individual.

The Benefits of Guardianship and Power of Attorney

There are benefits to guardianship and power of attorney. However, there are also drawbacks to both.

  • A power of attorney is voluntary, can be easily revoked, and made by an individual who has the capacity to make decisions on his or her own. A power of attorney also does not involve a court, and an attorney-in-fact does not have as much formal accountability.
  • One of the biggest differences between guardianship and power of attorney is that a guardianship can be either voluntary or involuntary, and a guardianship can only be ended by an order by the court. A guardianship typically involves an individual who cannot make his or her own decisions, due to age and/or health. While a power of attorney does not involve court proceedings, a guardianship has more formal accountability.

How do You Become a Guardian?

There is a process in becoming a guardian for an incapacitated individual. It is best to find and keep an attorney who can help with the legal paperwork and guide the individual's family through the process of guardianship. With the help of an attorney, it is important to have a clear understanding of the health and finances of the individual being protected. Here are some more steps that need to be followed when obtaining a guardianship:

  • Obtaining a Physician's Report is important to verify that the incapacitated individual cannot independently handle his or her own finances or make decisions.
  • It is also important to file a Petition for Guardianship with a court and have all parties, including the incapacitated individual, family members, or caregivers, informed of the petition.
  • The filing fee must also be paid.
  • The court will hold a hearing where named witnesses will provide evidence to support the petition, if the incapacitated individual consents to the petition or cannot respond to any inquiries due to a disability.
  • A guardian will be appointed if evidence is considered sufficient. The judge will then provide letters of guardianship to the guardian, so that he or she can act on behalf of the incapacitated individual.

What is the Role of a Power of Attorney?

On many occasions, a family member is chosen to act on the behalf of the incapacitated individual, such as a spouse or one or more children. If at least two children are named to simultaneously act as power of attorney, there is a chance that there may be some disagreement.

There may also be a possibility that not all individuals named power of attorney would be available to act on behalf of the incapacitated individual. There, however, should be some indication that the majority act in the absence of full agreement and availability.

To act as power of attorney, there are no special criteria that need to be met. However, the individual serving as power of attorney must not be under the age of 18 years old or incapacitated in an intellectual or developmental sense.

The power of attorney or attorney-in-fact is responsible for managing the incapacitated individual's financial affairs, as well as putting the individual's estate plan into effect. The power of attorney is not allowed to rewrite the individual's will, but an attorney-in-fact may amend trusts for the individual or transfer the individual's assets to already created trusts. The power of attorney can change the title to the individual's assets, as long as the individual approves those powers upon the power of attorney.

What is the Guardian's Role?

The role of the guardian is to act in the best interests of the incapacitated individual. If there is a guardian of the incapacitated individual's estate, then filing an inventory of assets is crucial, as well as keeping the incapacitated individual's money and other financial assets separate from the guardian's money and other financial assets.

The court must give permission to the guardian before the incapacitated individual's valuables and assets can be sold. If an unusual expense must be made for the benefit of the incapacitated individual, the court must approve the request for the guardian. The court must also approve the request to move the incapacitated individual away from his or her home.

The guardian is also responsible for taking into account the incapacitated individual's income, valuables, assets, and expenses with the court.

Contact Our Trusted Michigan City, Indiana Probate Litigation Attorneys

If you have any further questions regarding guardianship and how this could help you and your loved ones, it is best to contact experienced legal professional. Call a Michigan City probate litigation attorney at 219-690-8997 to get the help you deserve.

Sources

https://www.realservices.org/pdfs/AdultGuardEng.pdf

https://www.arcind.org/future-planning/guardianship/

https://www.americanbar.org/groups/real_property_trust_estate/resources/estate_planning/power_of_attorney.html

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