Family Attorney

A Power of Attorney is one of the most important legal documents a person can have. Without a comprehensive power of attorney, many people are neither able to handle their loved ones’ financial matters nor make health care decisions without seeking court intervention (Guardianship and/or Conservatorship).

We often have clients come into our office assuming that, just because their assets are titled jointly with their spouse, parent or partner, they are able to liquidate accounts to pay bills, hire attorneys, sell their jointly titled real estate, etc.

Unfortunately, that isn’t that case. In fact we frequently see clients how have failed to put in place properly drafted Power of Attorney documents allowing them to act. And now, their loved one has developed dementia or is incapacitated in some other manner, an can no longer legally create a Power of Attorney document (a person must have capacity to sign legal documents). We have to tell those people that in many cases, in order to handle the financial affairs and medical decision making of their loved one, A Guardianship (also called a Conservatorship in some states) is
likely required.

What is a Power of Attorney?

A power of attorney is a legal document where one person (the principal) authorizes another (the agent) to act on their behalf. There are financial powers of attorney which allow your agent to
make decisions regarding your property and healthcare powers of attorney which allow your agent to make decisions regarding your health care needs. NOTE: They go by different names in different states such as Medical Power of Attorney, Health Care Power of Attorney, Advance Directive etc.

Your power of attorney can be broad in scope, giving your agent the ability to make any and all financial and personal decisions for you (a General Power of Attorney) or you can limit your agents
authority by specifying the types of decisions you would like them to make on your behalf (a Limited Power of Attorney).

You also have a choice whether you would like your agent to have the ability to make decisions both now and if you become incompetent (a Durable Power of Attorney) or your agent can be
limited to make decisions only when you become incompetent (a Springing Power of Attorney).

What is a Guardianship?

Guardianship is a legal relationship whereby the Probate Court gives a person (the guardian) the power to make personal decisions for another (the ward). A family member or friend initiates the
proceedings by filing a petition in the appropriate court where the individual resides.

A medical examination by a licensed physician is necessary to establish the condition of the individual. A Court of law then determines the individual is unable to meet the essential requirements for his or her health and safety and appoints a guardian to make personal decisions for the individual. Unless limited by the court, the guardian has the same rights, powers and duties over his ward as parents have over their minor children. The guardian is required to report to the court on an annual basis.

*A Conservatorship (sometimes also called a Guardianship in some States. And to confuse matters, sometimes called both Guardianship and Conservatorship) is a legal relationship whereby the Probate Court gives a person (the conservator) the power to make financial decisions for another (the Conservatee).

The Court proceedings are very similar to those of a Guardianship except the Court determines an individual lacks the capacity to manage his or her financial affairs and appoints a conservator to make financial decisions for the individual. Often the court appoints the same person to act as both guardian and conservator for the individual. Like the guardian, the conservator is required to report to the court on an annual basis.

The Differences

A power of attorney is a relatively low cost and private way to decide which family member or trusted friend will have the legal authority to carry out your wishes if you can no longer speak or
act for yourself.

If you do not have a power or attorney or if your power of attorney is not drafted properly, and something happens that results in your inability to make decisions, your family/friends may later face court proceedings and court supervised Guardianship and/or Conservatorship.

A court proceeding is not only costly, but the person appointed as your Guardian/Conservator may not be the person whom you would have chosen yourself. Additionally, there can be constant court supervision for that person’s lifetime, with on-going reporting required and permission to take almost any action on behalf of the incapacitated person.

And, as stated above, not having a properly drafted power of attorney could significantly limit financial and/or medical decision making that could be done on behalf of the principal.

I often tell my clients that if you do nothing else, at the earliest signs of dementia (if you haven’t already done so) get properly drafted power of attorney documents put in place immediately. They are really that important.

By: Brian Willie