Power of Attorney or Guardianship?

There has been much confusion over the legal meaning and process of a Power of Attorney and Guardianship – even among professionals who deal in areas such as finances, who need to understand the distinctions. The demographics of our neighborhoods are changing as the population is aging, which makes this issue of growing importance. This blog article is meant to be a brief overview to help differentiate between Power of Attorney and Guardianship. Consultation should be sought with an attorney familiar with these issues to give advise on your specific circumstances and needs.

A Power of Attorney, or POA, is a document (or the person granted authority) and is voluntarily given to a grantee by the grantor allowing the grantee (POA) to act on grantor’s behalf. There is no court involvement in establishing the POA, and the signature of the person authorizing this power (grantee) in another (grantor or POA) must be notarized. The person authorizing the power must also be mentally competent. The powers given may be limited or for a specific purpose, such as transferring title on a vehicle. POAs may also be limited for a specific date or period of time.

A POA may also be durable. This means the powers given may endure beyond the incapacity of the individual (grantor) granting the powers in another (grantee). Often this is done between spouses, or powers are given to an adult child or other trusted adult. Once a Power of Attorney is given, both the individual giving the powers and the person receiving authority to the powers can act on behalf of the grantor. The grantor does not loose the ability to make their own decisions on matters, but additionally gives this ability to another, their POA. A durable Power of Attorney may prevent the need for a guardianship after the individual granting the powers (grantor) becomes incapacitated and unable to make their own decisions. Often this is done to allow another to pay bills, manage assets, manage income, and other financial dealings for the grantor.

Both a POA and a Durable POA may be revoked by the grantor. Again, please consult an attorney if you need to revoke a POA as certain procedures must be followed for effectiveness.

A Guardianship is a legal process where a court gives authority over a person and/or a person’s estate (assets and liabilities) to a competent person to act in the best interest of the ward (the person whom the guardianship is over). This process can be accomplished without a court hearing or trial if the appropriate consents are obtained and the court approves. If all necessary consents cannot be obtained, a judge will need to declare the person needing the assistance incompetent. Incompetency may be due to the fact that the ward is a minor or due to mental or physical disabilities of the ward. Guardianships may also be for limited or specific purposes or for more comprehensive authority. The guardian is given a document, called, Letters of Guardianship, to prove their authority. With a guardianship, the ward no longer has the authority to act on their own behalf. The guardian is charged with duties and responsibility to act in the best interest of the ward and/or the ward’s estate. Guardians are required to periodically submit accountings to the court regarding the income, expenses, and well-being of the ward. A guardianship may be dismissed and/or the guardian may be replaced by the court.

Both the powers and authority given by a Power of Attorney and a Guardianship terminate at the grantor or ward’s death. This article does not deal with the definition or need for a Health Care Representative or a Personal Representative of an estate. There are also other processes that may be used in addition to the POA and Guardianship to help individuals and their needs. As individuals need assistance, there are different tools available to give this authority and help them manage their affairs. Consultation with an experienced attorney in this area of practice is highly recommended. Laws vary from state to state. This article addresses Indiana law only.

To speak to one of our experienced attorneys, please call Julie Camden at 317-770-0000 or fill out our online contact form.

This website supplies general information about the law but it is provided for informational purposes only. This content does not create an attorney-client relationship and more importantly is not meant to constitute legal advice. You should not act on any of the information contained herein without first consulting an attorney.