What Is a Guardian?
When a person becomes incapacitated, either physically or mentally, due to an illness or an accident, the court system must appoint a person known as a "guardian" to act on behalf of the incapacitated person’s interests.
In Pennsylvania, guardianship is requested through a petition filed in the Orphans’ Court that outlines the facts of the incapacitated individual’s disability, age, assets, family support system, etc. The petition must be accompanied by medical evidence of incapacity, although this requirement may be waived if the individual is willing to have a guardian appointed.
The judge will appoint a physician or psychiatrist to examine the proposed ward and prepare a report on the ward’s mental abilities before the judge can proceed with appointing the person a legal guardian.
Legal guardians are required to file annual accountings with the court , listing all income and expenses. In addition, they are also required to file periodic reports to show the incapacitated person’s progress. If the incapacitated person has substantial assets, the judge will likely require a bond as a further protection for the ward.
Guardianship is not always required for an incapacitated person. If the individual has executed a valid durable power of attorney, the agent named under the document is able to step in and act on behalf of the person. Ultimately, the decision on whether a guardian is required lies with the judge of the Orphans’ Court.
What Is Power of Attorney?
A power of attorney (POA) is a legal document that grants an individual (the agent) the authority to act on behalf of another in the event of incapacity. A POA can be durable or limited, lasting either until the principal dies or until the expiration date specified on the document, or it can be a springing power of attorney that becomes effective on the day on which a physician declares the principal incapacitated.
The execution of a POA enables the named agent to conduct financial business for the principal in the event of incapacity, which includes, but is not limited to, accessing bank accounts, real estate transactions, and filing tax documents.
A POA is particularly important if the principal travels outside the United States for more than one year without a plan for managing affairs. Incapacity may come as a result of an illness or injury that renders the principal unable to manage his or her affairs.
Guardian vs. Power of Attorney: Key Differences
The difference between a legal guardian and power of attorney lies predominantly in legal implications. A legal guardian is a formally sanctioned position under state law with authority and responsibility for managing the financial and personal affairs of a legally incapacitated adult or child. Conversely, a power of attorney is a document that simply appoints a person to act as the representative of another, in a general or limited capacity, to manage or secure their financial or personal affairs. Regarding the scope of authority, while a power of attorney is limited to what is authorized in writing, a legal guardian may have far broader powers, at the discretion of the court. The power of attorney contract is a completely private matter between the individual (referred to as the principal) and the representative (known as the agent). A legal guardianship, however, is initiated with the family or friends of the person in need of assistance making an application to a probate judge. A litigated hearing is held before the guardianship can be awarded, at which time the legal guardian is ordered by the court to carry out specific functions on behalf of the incapacitated adult or child.
How to Decide Between Guardian and Power of Attorney
When determining whether to pursue guardianship through a legal guardian or alternative decision-making authority, age and capacity always come into consideration. However, there are additional considerations as well. For example, would the person for whom the arrangement is being made be best served by simply creating a power of attorney to make health care and financial/asset decisions? Or would he or she be more properly served by a legal guardian with broader purview and responsibility? In cases where there is a formal diagnosis of dementia or Alzheimer’s disease or another medical condition where the person in question cannot – or does not seem to be able to – manage his or her own affairs, then it would usually be the case that a legal guardianship would be in order.
An individual coming of age may very well need to tap into one of these alternative decision-making authorities, although the option may or may not mean a completely loss of independence. What is essential is the assessment of capacity. The underage adult played in the hands of another individual may have the capacity to provide for his or her own health care and financial/asset decisions while still being under the tutelage of a parent or other adult guardian.
Common Situations for Each Legal Option
The decision of whether to name a legal guardian or power of attorney is highly individual, but there are certain common scenarios that arise. In the case of a legal guardian, many times the situation involves an elderly parent unable to make their own decisions due to advanced dementia. Their children may be informed that they can no longer make decisions in their best interests and require another family member, medical professional or an attorney to take over those duties. A real world example of this may be seen in this scenario. John is a 77-year-old retired high school teacher who was diagnosed with Alzheimer’s disease two years ago. The disease has rapidly progressed to the point that John does not recognize his children and cannot even recall where he lives. His wife, Anne, has been struggling to manage her husband’s care and her financial responsibilities. A physician, a social worker , and John’s elder law attorney have all urged Anne to seek legal guardianship for her husband and to assign a legal guardian because they believe Anne will be overwhelmed and unable to function as a caregiver much longer. Power of attorney is most commonly associated with planning finances. Younger people may also get a power of attorney to assist their parents in handling financial matters. A common situation involves a college age child going abroad for a semester and naming a power of attorney for financial matters while they are away. A real world example of this may be seen in this scenario. Robert has been accepted into a study abroad program in England for an entire semester. In order to take care of his banking matters and sign school related forms while he is away, Robert needs his father, Thomas, to sign a power of attorney giving him the authority to act on Robert’s behalf. Other situations may involve a real estate transaction or the inability of the principal to travel to a signing. In this example, Mark is in the midst of a job change and real estate deal that require him to quickly sell his home and buy a new one. He is negotiating a closing date with the buyer. His lawyer sends him the real estate documents but Mark is currently on a business trip and will not be back in time to sign the paperwork. The closing is in three days. Mark rushes to his elder law attorney and they quickly prepare a power of attorney for Mark’s elderly aunt to handle the real estate transaction on Mark’s behalf. On closing day Mark’s aunt, as his power of attorney, signs all the closing documents related to the sale and purchase of his new home.
Legal Options and How to Move Forward
It is critical to have a legally binding document in order to become a legal guardian. For minors, that’s relatively easy – simply go to court, fill out the necessary paperwork and submit it to a judge to approve your guardianship of the minor child. For adults, that’s more challenging. In order to be appointed as a legal guardian for an adult with diminished capacity, you must establish a legal incapacity of the individual in question. This process involves filing a petition with a local court; only after this person is deemed incapacitated can one apply for a guardianship. This requires a lot of documentation, which can be time-consuming and complicated.
A power of attorney only requires two things: a person who wants to serve as an agent and a principal who wants to grant that person either broad or limited powers over their property and/or finances. In most states, an adult can create a power of attorney, or POA, for either financial matters or medical decisions or both. POAs can go into effect either as soon as someone signs them or only in the event of incapacity. For this reason, POAs are generally less cumbersome than guardianship, but they also provide less protection because they only directly address a single issue.
A slight variation on the process – called a "conservatorship" or "conservatorship proceeding" – can be used when someone applies for guardianship of an adult. A conservatorship is similar to a guardianship and is governed by the laws of an individual state. The individual filing for a conservatorship must go to a civil court in their local jurisdiction and file a petition alleging incapacity. An investigation will follow, and after the investigation, a hearing is usually held where one party is chosen to be the conservator. "Conservator" and "guardian" are often used interchangeably and mean the same thing in all states except Alaska, Connecticut and Florida.
The steps involved with guardianship proceedings typically include:
The process for obtaining power of attorney is fairly straightforward in comparison to the guardianship process. Someone interested in establishing a POA for themselves simply needs to fill out the appropriate form approved by the state. Only a few have different requirements for health care and general POAs. However, it should be noted that health care POAs are slightly more difficult, unlike general ones, a witness needs to sign the form.
Closing Thoughts on Which is Right for You
It is critical to thoroughly understand both the differences between a legal guardian and a power of attorney and the legal and financial ramifications of each before deciding which is best for you. In general, if the person who needs help is competent and lucid, a power of attorney is probably the better option . If the person who needs help is not capable of granting authority over their decisions, or if they are misusing alcohol or drugs to the detriment of their physical, mental and/or financial health, then a legal guardian may be the better solution.
Mistakes made during probate or guardianship proceedings can have a life-long impact on the individual and their families and costs can be extreme. It is highly advisable to seek legal counsel to assist in the capacity decision-making process.