Clarifying What a Legal Guardian is
A legal guardian is a person or entity appointed by a court to make decisions for a person who is deemed incapable of making those decisions. There are several circumstances that might lead to the appointment of a legal guardian. For example, a parent might have a mental illness that prevents his or her child from being cared for safely. A guardian may also be appointed if an adult becomes physically or mentally incapacitated or gets into legal trouble that compromises his or her ability to make decisions.
Primarily, a legal guardian has to follow the law and make decisions that will benefit the ward. This means that a guardian has to consider what decisions the ward would make for himself or herself, rather than imposing his or her own opinions on the ward . If the ward comes to consensus with the guardian or if the guardian is appointed as the decision maker in a matter, then he or she is acting according the best interest of the ward.
A legal guardian must also communicate with the court throughout the guardianship to help ensure that the ward’s best interest is always followed. For instance, if the ward goes to a nursing home, the guardian must notify the court. The guardian must file updates with the court every year. The updates should include the financial status of the ward and the general health and well-being of the ward. If the guardian wishes to make a decision that could alter the well-being of the ward—such as selling the ward’s home—the guardian must obtain a court order to do so.
What Does Power of Attorney Mean?
A Power of Attorney is a legal document that enables one individual to act on behalf of another individual, for a specified purpose. Such documents are commonly utilized to account for those situations when an individual is legally incapable of acting on his or her own behalf. It is important to note that "Power of Attorney" is a generic term, applicable to any instrument whereby a person (the principal) appoints an agent (the attorney-in-fact) to act for the principal. When a power of attorney is signed, it does not have to be contested, but is valid from its execution until revoked. An agent can benefit by receiving a gift or exercise powers of attorney in a way that may not be intended by the principal under whom the authority derives. A general, durable or statutory power of attorney can be revoked by a written instrument. Such Power of Attorney endures until either revoked or termination under the applicable law.
A power of attorney may be:
General Power of Attorney: A general power of attorney enables the agent to exercise any power over the principal’s property.
Special Power of Attorney: This type of Power of Attorney grants the agent the authority to act only in specific matters.
Durable Power of Attorney: A durable power of attorney is used to facilitate the management of business transactions when the principal is unavailable. This Power persists even if the principal becomes incompetent.
Springing Power of Attorney: A "Springing" Power of Attorney comes into effect at a future date, or upon the happening of a future event.
Health Care Proxy: A health care proxy appoints an agent to make health care decisions for the principal in the event the principal cannot make and/or communicate health care decisions.
All Power of Attorney documentation can be terminated or modified by a subsequent written Power of Attorney executed by the principal.
The Process and Authority Explained
The process of appointment for both legal guardianships and power of attorney differs significantly. Appointing a legal guardian requires a court hearing and judicial review. The process to grant or revoke a financial or health care power of attorney as set forth in Arizona Revised Statutes (A.R.S.) § 14-5501 et seq. and A.R.S. § 14-2801 et seq, respectively, does not. Appointing a guardian is an onerous and expensive procedure, which requires the involvement of the court system; whereas, it is quick and easy to execute a power of attorney. To appoint a guardian over an incapacitated person’s personal and/or financial decisions, a petition must be filed with the court, a court appointed ombudsman must interview the alleged incapacitated person and report her findings, notice of the hearing must be given to the alleged incapacitated person and certain relatives and an attorney ad litem must be appointed to represent the alleged incapacitated person.
In contrast, if someone is worried enough about the risk of loss of capacity, he or she can sign a financial and/or health care power of attorney today and designate an agent to make those decisions at the appropriate time without anybody else’s knowledge. A financial or health care power of attorney can be registered with a financial institution or medical facility so they can act immediately when that person is needed. If the person changes his or her mind at any time, revocation can occur as easily as the power of attorney was created. Typically, the document would be revoked using a similar procedure as the creation of the document, namely signing a statement indicating the intent to revoke and obtaining the signature of the agent. It is wise to notify the agent, but it is not necessary to obtain the signature of an agent to create the valid revocation. Notice to the agent of the revocation may be helpful later to alleviate questions of intent. Simply revoking the agent’s authorization does not remove them from having the ability to access an account, so it is wise to notify all financial institutions of a revocation to avoid miscommunications.
Key Differences in Scope and Length
The authority that a guardian holds over a child is more permanent than that of a power of attorneyholder, who will usually have authority over only a single area at a time. A guardian has the authority to make decisions in a variety of important areas, while a POA may only make medical or financial decisions. A guardian is required to report to the court on his or her decisions; a POA has no such requirement. The time commitment that a POA is required to make depends largely upon the situation. The role of a guardian is more permanent, lasting until a child reaches the age of majority, but can be terminated in other instances by the court if the guardian is no longer adept in the role. A POA is usually only for a temporary, specific purpose such as a surgical procedure or other medical treatment. A POA will be in force until that task is completed, or until it is revoked or modified by the individual granting the authority. Both types of authority require periodic renewal if the role is to continue; while a guardian must give regular reports to the court of the care of the minor child, a POA must be refreshed if the person granting the right becomes unable to do so due to medical conditions such as dementia. When applying for guardianship, there is a standard decision-making process that must go through the court, but for powers of attorney, there are many different options that can be used. In most cases, the POA document must be signed in front of a notary public, with some states requiring witnesses as well. For certain types of powers of attorney there is a statutory form that must be used.
Deciding on the Right Option
When navigating the decision between appointing a legal guardian or arranging a durable power of attorney, a few hard questions need to be asked. What is my financial situation? Do I have children or dependents? Is my income low enough that I do not create an undue burden on myself? Then, consider how much time you can commit to a caregiving situation and how much help do you need?
Some people prefer the control a power of attorney brings, but if they have children or dependents, then a legal guardianship may be more appropriate . If someone has a sufficiently high level of cognitive functioning and a low level of dependency, they are more likely to want a durable power of attorney. A legal guardian appoints someone else to handle the other’s affairs in exactly the same manner as he or she would be capable of doing for themselves.
The decision will essentially come down to how comfortable the individual is with another person making decisions on their uniformed behalf.
Influence on Personal, Financial Affairs
Both a legal guardian and a power of attorney can wield significant influence over personal and financial matters. The level and scope of that influence can vary widely depending on the specifics of the guardianship and power of attorney arrangements.
A legal guardian is responsible for making decisions related to the personal and physical care of a person deemed incapacitated by a court. This includes, but is not limited to, health care, living arrangements, and the care and supervision of the incapacitated person. For example, the legal guardian makes decisions as to the living arrangements of the incapacitated person, such as whether to keep him or her at home, place him or her in nursing or long-term care, or move him or her to a different home.
By comparison, a power of attorney only grants authority over the assets of the principal, and not over his or her body, health/death decisions, or living arrangements. A power of attorney is often granted for the purpose of handling the financial affairs of a person who may become physically unable to do so at some point in the future.
The terms of a guardianship and power of attorney vary widely from state to state, and the laws of each state should be referenced.
Common Misunderstandings
Although the concepts of legal guardianship and power of attorney are often confused with one another or used interchangeably in conversation, they are two completely separate legal entities. A legal guardian is an individual or organization that has been appointed by an order of the court to care for someone who has been deemed incompetent to the extent that they are unable to perform necessary tasks to care for their personal wellbeing. Power of attorney is, instead, a legally binding document that allows an individual the authority to act on behalf of another person, typically in business or legal matters.
Below are some common misconceptions about legal guardianships and powers of attorney. Despite being granted legal power, a power of attorney’s authority can be easily revoked. If the person granting the power of attorney ("the principal") wants to cancel the power of attorney for any reason, including a change in circumstances, they can execute a written Revocation of Power of Attorney document at any time. When the person executes the Revocation document, the named agent no longer has any authority to act on behalf of the principal under the previously granted power of attorney. Over time, a principal may have to execute multiple powers of attorney or legal documents granting a different individual the authority to act for them. While these documents may reference the other documents that have been executed, the Revocation of Power of Attorney document will at that time cancel all previous documents and make the individual who had been granted such power, unable to continue to act on behalf of the principal. In contrast, guardian appointments remain in effect until a change in circumstance necessitates a different appointment which requires a court action, the death of the ward, or by order of the governor. The guardianship authority will not be revoked by the execution of a written revocation document, and will only be terminated when and if the court cancels the appointment. It is important for the agent of a power of attorney to understand that their authority is derived solely from the legal document naming them as an agent, and has no authority to act independently of that document. While a Guardian is generally required to have a Home Study completed by the Court prior to awarding of guardianship and a scheduled hearing, a Court appoints a Guardian and gives that Guardian specific authority based on a recommendation contained in the Home Study, the Court will generally not entertain a petition to expand or restrict the authority of a Guardian. A Guardian is appointed for an individual as a whole, in terms of their personal and financial decision making. While Court approval has been obtained to appoint the Guardian, obtaining an order to extend the Guardian’s power may or may not be required depending on the specific authority being sought. The misconception about mental capacity is that if there has been a determination that a person is completely incompetent and requires a guardian of their estate, that person must also be incompetent for all purposes, including medical decisions, and thus should never be given a power of attorney for that purpose. That is incorrect. Under certain law, a Power of Attorney is not considered to be a "declaration" as defined in that statute, and thus an individual can appoint an agent to make healthcare decisions when the principal is not competent to do so, but does retain certain "residual rights" granted to him/her in the statute. The authority to make such decisions is contained in the power of attorney document and not contingent on a finding of incapacity by the court. Although a person may be totally incapacitated with respect to their financial affairs and require a Guardian to make decisions in that regard, they still retain the residual right to make other decisions for themselves if they have not specifically divested themselves of that right in a power of attorney.
When to Seek Professional Guidance
When in doubt, it is always wise to seek legal advice when considering appointing a legal guardian or arranging for a power of attorney. Engaging with these legal matters can be complex and nuanced. Professional legal assistance can guide you through the particular requirements and help you organize your file so that it is clear what should happen when the time comes that you can no longer make decisions for yourself . As well, in some cases having a legal professional who knows you can also make better health care decisions when the time comes, in most jurisdictions that is allowable. With careful planning you can provide very specific clear instructions, or you can leave the decision with your representative to be guided by their judgment to make those decisions. Limits can be placed on types of decisions that can be made.