Guardianship vs Power of Attorney: Understanding the Difference
In New York, guardianship and power of attorney (POA) are tools used to manage a person’s affairs when they cannot do so themselves. Both tools allow other people to make crucial decisions on behalf of other people. However, while these two tools may serve the same purpose (ensuring someone can make decisions on behalf of another), they are significantly different. It is vital to understand the difference between guardianship and power of attorney.
Understanding the Power of Attorney (POA)
A power of attorney or POA is an essential tool that should be part of any comprehensive estate plan. This tool helps people plan for the unknown. The POA is largely a financial document through which a person (the principal) allows someone else (the agent) to act on their behalf. The agent is given the power to make legal and financial decisions on behalf of the principal. A POA can be broad in scope and give an agent a wide range of powers, or it can be narrow and give an agent only specific or limited powers. Having a POA is beneficial because if you become incapacitated, you will have someone you trust making legal and financial decisions for you. Since the POA is signed before the need for it arises, it is called an “advance directive.”
Understanding Guardianship
Guardianship is a legal relationship established through the court system. It is effective if someone a) has not signed a power of attorney and other advance directive, and b) cannot make decisions, manage their affairs, or is at risk of harm due to a severe illness, dementia, disability, or other conditions. In that case, a legal proceeding is commenced in court by someone looking to control your assets. After a hearing, the court appoints a guardian to handle the incapacitated individual’s (the ward) affairs. A guardian can be authorized to make financial, legal, and healthcare decisions for the ward. Since guardianship involves a profound loss of freedom, the law requires that it be imposed only when there are no less restrictive alternatives, such as POA or when less restrictive options have been tried and proven ineffective.
Often, a family member, friend, or another person seeking guardianship will commence the guardianship legal proceedings in the county where the ward lives. The court will assess the alleged incapacitated person’s condition. Interestingly, a medical assessment is not required to establish a guardianship. If the Judge decides that the person cannot meet essential minimal requirements regarding their health and safety, the court will appoint a guardian to make decisions for this person.
Difference Between POA and Guardianship
Firstly, a POA is a voluntary agreement, whereas guardianship is an involuntary process. Second, a POA is created in advance to manage future incapacity, whereas guardianship is established after an individual becomes incapacitated. Third, guardianship involves court oversight and legal processes, whereas POA does not require court involvement. Finally, a POA can be easily revoked as long a person is mentally able, whereas guardianship is difficult to terminate.
Contact a Westchester County Estate Planning Attorney
Estate planning is complex, but a knowledgeable attorney can help you navigate it. Contact a qualified Westchester County estate planning attorney at the firm of Meyer & Spencer, PC, to schedule a consultation in our Westchester County or Putnam County offices.
