What is the difference between Power of Attorney and Guardianship?
Transcript:
A client approached me today regarding issues he's having with his mother who was recently admitted to the hospital. She had mounting medical bills that needed to be paid. He was wondering if there was a way that he could get access to her bank account, her brokerage account, in order to pay those bills. There's 2 different ways that you can do it. One is by power of attorney.
Now fortunately this individual did have a power of attorney document prepared prior to her going into the hospital, being admitted to the hospital, and that's essentially mentally incapacitated. The power of attorney document allows the individual to access her account, allows them to use that money for her best interest, to pay those medical bills.
Now power of attorney documents need to be prepared prior to an individual becoming mentally incapacitated. Usually they'll be done when an individual knows who they want designated as their potential power of attorney, who they want designated as the agent, as well as potentially who they want designated as their guardian.
The documents are very simple and straightforward. Some people get a little intimidated by them because they are a legal document. However they're very simple and straightforward to prepare. If you were to come into our office we would be able to do them fairly quickly at a minimal expense for you.
They're great to set up now while you have your mental capacity, in order to have them valid when you do become mentally incapacitated. However, if this individual, if he didn't have the power of attorney document set up prior to his mother going to the hospital and becoming mentally incapacitated, he would have had to go through a longer and relatively more expensive process in guardianship.
Guardianship is where you petition the court to have the court appoint you or whoever it may be, another family member, as the guardian of the individual's estate and person. To be appointed as a guardian of the individual's estate means that you are now responsible for her finances, for her bank accounts, her home, making all her payments, whether it be for house payment or medical payments, medical bills that are due at the time.
To go through that process it takes considerable amount of time as well. It could take between 3 to 6 months in order to get yourself appointed to get that appointment from the court, the order allowing you to go into her accounts to do that. To become the guardian of her person means that you are now able to make her medical decisions, what type of treatment, or whether to essentially end her life if for some reason she was on life-sustaining support at the time.
Now all these decisions can be done prior in a power of attorney document. You get a durable power of attorney for financial decisions, as well as a power of attorney for health care decisions. These will all lay out exactly what the individual wants if they fall into that state, if they become mentally incapacitated, or if the health care, if they are on life support and need decisions of what they like to do if they want to essentially pull the plug.
Those are issues that are dealt with prior to them getting into that situation, so you know exactly what the person wants and there's no guessing. These are all items that we do here, whether it be power of attorney documents which can be done fairly quickly and inexpensively, or in the case if someone wasn't able to plan ahead and it was essentially an unforeseen event, they become incapacitated, they'd have the power of attorney documents and we need to set up a guardianship. That's also something we can take care of here.
