Know the Difference: Guardianship vs. Power of Attorney
Often people are focused on appointing a Power of Attorney (POA) in the event that they are unable to make their own decisions, but have you thought about guardianship? What happens if your POA is unable to make decisions on your behalf? This is where guardianship plays a role.
What is Guardianship?
Guardianship occurs when a person is legally appointed to take care of and make any decision for someone who is deemed incapacitated, meaning they are unable to take care of themselves due to mental illness, sickness, or mental incapacity, or for a child until they are of age.
A guardian will make decisions related to physical health, safety, care, finances, and decisions related to any owned property.
Guardianship is appointed after the person has been deemed incapacitated or if a child’s parents are deemed incapacitated, or if a child loses their parents. However, as this is a court appointment, the guardian is not necessarily the person the individual would choose to fulfill these duties, so guardianship is often not considered the preferred method.
What is a Power of Attorney?
Similar to Guardianship, a POA is someone who has been appointed to take care of and make decisions for someone who is unable to do so for themselves.
The key difference between Guardianship and a POA is that a POA is determined prior to the person needing assistance, and that person decides for themselves whom they would like to be the POA.
A POA can be appointed to make health care and medical-related decisions, financial decisions, and other factors you determine when assigning.
If your POA cannot make these commitments due to their incompetence or is unwilling, the court will appoint you a Guardian.
Long-Term Financial Goals
When it comes to your investments it is important to appoint a POA who is familiar with your long-term financial goals. This will ensure a seamless transition should the time come for your POA to make investment decisions on your behalf.
This content is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this content should consult with his or her financial partner or advisor.