Guardianship vs Power of Attorney
Guardianship and Power of Attorney are two legal instruments that allow a person to take control of another person’s assets, responsibilities and personal affairs in general. Both allow a person to take decisions for another person, but these two legal documents are not the same, as both accord different statuses and different levels of control to holders of these documents. Let us take a closer look at these documents to understand which one is better suited in different set of circumstances.
What is Power of Attorney?
If for any reason (such as travelling out of the country, medically unfit or incapacitated, or being under the legal age) you are not able to sign legal documents or take decisions for yourself, you have the liberty to assign these duties to someone else who may be your close friend or relative. For example, if it is a matter of selling real estate, you can give power of attorney to your spouse or a close friend whom you trust blindly. You must be in a proper state of mind when drawing up this POA. The person having your POA can take all financial decisions on your behalf, and may even have medical POA to take decisions about your health care needs. The person who holds the POA can take all business and financial decisions, and he cannot be questioned for his actions.
What is Guardianship?
This is a legal document that appoints another person as your guardian or care taker. The person who becomes a guardian for another person (ward) is appointed by a probate court and allows the guardian to take decisions on behalf of the ward for his personal life. Guardianship is wider in implications as a guardian can take personal decisions apart from deciding financial matters for the ward. Guardianship is granted only through courts and is necessary when a person is incapacitated. The court appoints an evaluator who decides if the ward truly is incapacitated or if he genuinely requires a guardian.
What is the difference between Guardianship and Power of Attorney?
• Power of Attorney is inexpensive in comparison to guardianship as it does not require court permission and attorney fees.
• A person decides whether he needs to give power of attorney to a friend or relative, to manage his affairs, whereas a court decides if a ward needs a guardian to manage his affairs.
• Principal pays for all costs incurred in drawing POA while the ward’s estate pays for the fees of courts and attorneys in guardianship.
• Principal can revoke power of attorney while only courts can revoke guardianship.