Articles

Power of Attorney v. Guardianship

By Kim Boyer
Elder Law News
October 2004

One of our readers recently called our office to ask if we had literature on the difference between a Durable General Power of Attorney and a Guardianship. Due to the overwhelming number of times our office has been asked that question, we chose to make it the topic of this month's Elder Law News.

What is a Power of Attorney?
A power of attorney is a legal document where one person (the principal) authorizes another (the agent) to act on their behalf. There are powers of attorney for assets which allow your agent to make decisions regarding your property and there are powers of attorney for health care which allow your agent to make decisions regarding your health care needs.

Your power of attorney can be broad in scope, giving your agent the ability to make any and all financial and personal decisions for you (a General Power of Attorney) or you can limit your agents authority by specifying the types of decisions you would like them to make on your behalf (a Limited Power of Attorney).

You also have a choice whether you would like your agent to have the ability to make decisions both now and if you become incompetent (a Durable Power of Attorney) or your agent can be limited to make decisions only when you become incompetent (a Springing Power of Attorney). You must be competent to execute a power of attorney. If you are not competent to execute a power of attorney, then a guardianship may be necessary.

What is a Guardianship?
Guardianship is a legal relationship where a court gives a person (the guardian) the power to make personal or financial decisions for another (the ward). A family member, public or professional guardian initiates the proceedings by filing a petition in the proper court. A guardianship over the person gives the guardian the power to make personal decisions for the Ward. A guardianship over the estate gives the guardian the power to make financial decisions for the ward. Often the court appoints the same person as guardian of the person and guardian of the estate.

Appropriate documentation is necessary to establish the need for a guardianship. A court determines whether the individual is unable "to properly manage and take care of himself or his property, or both." (NRS 159.019). The guardian is required to report to the court on an annual basis.

The Differences
A power of attorney is a private way to decide who will have the legal authority to carry out your wishes if you can no longer speak or act for yourself. It is less costly than a guardianship, which is a public proceeding and the person appointed as your guardian may not be the person you would have chosen.

A power of attorney is limited in its authority to the scope of the document. Financial institutions sometimes refuse to honor powers of attorney for assets, due in part to their fraudulent use by agents. In contrast, a guardian has broad legal authority which is recognized by medical providers and financial institutions. A guardian is subject to court supervision for protection. Contact an attorney to appropriately address your situation.

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