The Differences Between Legal Guardianship and Power of Attorney Explained

What is Legal Guardianship and What is Power of Attorney?

Legal guardianship and power of attorney are two crucial legal concepts that often overlap in their practical application. While they both serve the purpose of managing an individual’s financial, medical or legal affairs, each is designed for different circumstances and individuals. It’s important to understand the differences between the two so you can ensure all your future legal decisions will be made by the most appropriate person.
At its core, a legal guardian is an individual or group of individuals who manages the affairs of another individual who has been deemed physically or mentally incapable of doing so him- or herself. Guardianship is generally determined through a judicial proceeding in which a court assesses the circumstances and finds that guardianship is appropriate. Attorneys usually assist guardianship candidates in collecting the necessary documentation and presenting a case to a judge who will then make the final determination.
Power of attorney is a little bit less formal. When a person (the principal) wants to grant another individual (an agent) authority to handle his or her legal or medical needs, he or she designates the person as having power of attorney. The decision to allow another person to act on your behalf is entirely voluntary and is not decided in a court of law.
Although both of these decisions may be made on a voluntary basis , their implications and applications could not be more different.
Guardianship indicates that the individual does not have the mental and physical capabilities to make his or her own decisions. Legal guardianship decisions deal with the general affairs of a person, including their finances, health care, residence, recreation, education and job opportunities.
A person with power of attorney, on the other hand, is merely given access to another person’s decision-making tools. This could mean access to a locker for the purposes of opening a lock to secure property. It could mean that an elderly parent chooses to designate a child as his or her agent to make financial decisions. It could also mean that a person gives a trusted friend authority to execute legal documents and contracts on his or her behalf in case that person is genuinely unable to do so.
The distinction between guardianship and power of attorney is important because guardianship grants another person the right to make decisions for an individual who cannot accomplish the same tasks on his or her own. A person with power of attorney can make decisions on behalf of a person who is perfectly capable of handling his or her own legal affairs.

Legal Guardianship Explained and When to Use It

Legal guardianship is a long-term process through which a person, who has not been the parent of the minor child previously, is assigned all rights and duties that a parent has prior to 10 years old. The guardian has full time custody over the child. A legal guardianship can last until a child is 18 years of age. Legal guardianship is even more permanent than adoption. Legal guardianship differs from a Power of Attorney at that a Parent cannot sign a Power of Attorney for a Guardian, if the parent is alive, and the child is not in need of statutory services. For a parent, the effect of appointing a legal guardian means that a parent will NOT get their child back once a legal guardian has been established and the Legal Guardian has filed the appropriate paperwork in the appropriate court, such as a petition to terminate parental rights.
The process is complex and can vary tremendously between states, but the court must always be involved in appointing a legal guardian. This is because a legal guardian has many rights that a biological parent would have under the law. To obtain legal guardianship, an individual must petition the state court and petition for his or her legal guardianship rights. A judge then has the ability to grant, modify, or limit the legal guardianship.
Legal guardianship generally lasts until the ward becomes majority age, which is generally understood to be 18, unless a statute has been adopted, or a court decision has been made, that has expanded the legal age of majority. Exceptions exist in some states for individuals that will become "legally incompetent," disabled, or otherwise unable to care for themselves.
If a child is incapacitated, has a disability, or is otherwise unable to care for themselves, the legal guardian may have the authority to provide medical consent on their behalf. This can be a helpful situation when an individual is unable to make decisions about their own health due to something like being in a coma.

Power of Attorney Explained and When to Use It

Power of attorney is a legal document that allows a third-party individual (known as an attorney-in-fact) to act on behalf of the principal. Although private powers of attorney can vary widely, in general they are legally binding legal documents that grant the holder the ability to perform almost any civil action, such as buying and leasing property or entering into contracts. A third-party attorney-in-fact may be either a person or an institution, like a bank or law firm. The several types of power of attorney include: Durable Power of Attorney: A durable power of attorney grants an attorney-in-fact the authority to make decisions regarding the principal’s finances during the principal’s incapacity. A durable power of attorney becomes effective once it is signed, and it remains in effect until the principal regains capacity or dies. Medical Power of Attorney: A medical power of attorney allows an attorney-in-fact (or a list of people in a priority order) the ability to make medical decisions if the principal can no longer do so for him- or herself. A medical power of attorney only goes into effect at the time incapacity occurs. Financial Power of Attorney: A financial power of attorney permits an attorney-in-fact the ability to make decisions regarding the principal’s appropriate fiscal matters, including whether the principal should have a guardianship. A power of attorney can be used for many different legal purposes.

Differences between Legal Guardianship or a Power of Attorney

A legal guardian is an individual appointed to look after the personal affairs of a ward (a minor or disabled adult) in case of the latter’s incapacity or absence. To appoint a guardian, one needs to get a court order after filing a petition. The appointment of a guardian is permanent until the ward dies, is gone and cannot be found, or is legally declared competent.
A Power of Attorney is an official document that grants a set of decision making powers to its holder for a specified period of time. The Primary Purpose of a POA is to protect your interests if you become unable to care for them. The two individuals involved with this legal procedure are: a principal (one who grants the power) and an agent (also known as an attorney-in-fact, who acts on behalf of the principal).
The Guardian is appointed by the court after petitioning and court hearing; the Guardian is able to make personal, financial, property decisions and given custody of the ward.
The POA is a written document drawn up privately between a principal and the agent; the agent is also called an attorney-in-fact.
The Guardian is required to make decisions in the best interest of the ward. He or she has to do everything in the best interest of the ward, as he/she cannot act outside of that "best interest" standard; The Guardian cannot change the will, nor make health care decisions, as those things are reserved to the ward until he/she becomes legally competent. The Guardian is obliged to file a report with the court every year and to submit all medical and financial records to the court.
The Agent can make decisions in the best interest of a principal and is required only to look out for the principal’s specific interest’s as spelled out in the POA document. Once the principal legally regains competency, the POA is invalidated and the principal regains all his/her legal rights. The power of attorney is not required to file any reports with the court.

Legal Guardianship vs. Power of Attorney: Which is the Better Choice?

When faced with the complex decision of whether legal guardianship or power of attorney is the most suitable option for a loved one, there are several important factors to examine. Assessing specific needs and carefully reviewing related legal requirements can help you make an informed decision about the type of care and authority required. If your loved one is a vulnerable adult facing mental incapacity or severe disabilities, legal guardianship is recommended, as these individuals are unable to consent to treatment or interface with healthcare providers and must have a legally sanctioned representative to act on their behalf. Legal guardianship is time-consuming, costly and may involve court intervention. Therefore, in the absence of a vulnerable adult needing a representative with all necessary powers , power of attorney is the preferred choice. If your loved one does not face any incapacitation issues, but might require someone with authority to handle financial or legal matters or obtain medical treatment in case of emergencies, a durable power of attorney is the way to go. This legal document allows loved ones or trusted friends to act on behalf of the disabled individual’s interests when necessary, but with less time, expense and court involvement than guardianship. If your loved one has a legal advance directive in place that outlines preferences for guardianship in the event of a medical emergency, or has requested a durable power of attorney be enacted, there are no issues: the right document will have already been created in accordance with your loved one’s needs and desires.

Understanding the Legal Implications

Establishing legal guardianship or assigning power of attorney can have significant ramifications. Certain rights and privileges can be lost once a guardian is appointed for a person. The protected person – the individual who has a guardian put in place over them – must follow the legal guidelines established by the guardian. This can change the way expenses are paid, introduce restrictions on actions the person can take with their money and property, and more.
For those assigning power of attorney, revoking the contract can be impossible while they are still able to do so. If they have the cognitive capacity to do so, they can cancel this agreement at any time. However, if they set this grant of authority into motion when they were not fully in control of their mental faculties, it can be difficult if not impossible to prove that they were competent at the time. Then, the POA or DPA will still have power.
These are some of the risks and liabilities associated with establishing power of attorney and legal guardianship, whether as either side of the relationship. Establishing these relationships is complicated – and potentially dangerous and damaging – enough as it is; consult with an estate lawyer to ensure you understand the options, ramifications, implications, and processes involved.

Making an Informed Decision

In this article, we have examined the legal frameworks of guardianship and power of attorney—what they are, who they can be used for, how they are established, and how they work. We have also looked at how and when to use each, and outlined some of the most common misconceptions surrounding power of attorney. Both guardianship and power of attorney are used to manage the affairs of individuals who are considered unable to do so themselves—such as minors or incapacitated adults. However, it is important to note that both these legal tools have different uses and limitations, and as such should be used in very different situations. As such, understanding the difference between the two will allow individuals to make informed legal decisions for their own personal affairs or those of family members . In a nutshell, legal guardianship is primarily used to make decisions for a minor child, or for an incapacitated adult, who was not previously able to appoint their own power of attorney. Alternatively, power of attorney is used by an individual (the donor) to choose another individual (the attorney-in-fact) to handle legal and financial matters on their behalf, in the event they become incapacitated. The decision to use one tool or both will depend on the individual situation of the persons involved—there is no one-size-fits-all approach to guardianship or power of attorney. Nevertheless, ensuring the proper legal tools and safeguards are in place can significantly ease the legal and logistical burden of handling an incapacitated individual’s affairs.