Often times when I have to call a corporation for a custodial account, I am asked, “Are you the Power of Attorney.” My response is, “no, I am the Guardian.” To which they reply, “I am sorry I cannot divulge any information unless you are the Power of Attorney.” Then I have to go into an explanation as to why they can give me information. Then they will say, “Oh, so you are the Power of Attorney then.” Oy vey.
On paper they look somewhat the same; you are basically making the decisions for someone who is not capable of making decisions for themselves. However, they are not interchangeable.
Here are a few points to understand the difference.
Power of Attorney (POA)
- A proactive decision made by an individual when they are of sound mind.
- A designation of someone known and trusted to carry directives.
- Can be for Healthcare or of the Property.
- Two types of POA: one that is effective immediately and the other that requires proof of capacity.
- A Power of Attorney for healthcare can be revoked at any time.
- A Mental Health Directive is separate from the Power of Attorney and is needed in cases where the health issue is behavioral vs. clinical (IE: Bi-polar disorder).
- Is not a judicial order.
- No oversight for a Power of Attorney.
- Cost effective.
- A judicial decision made when an individual has not designated a POA.
- It is a request by someone other than the individual it is for.
- Can be of the Person or of the Estate.
- Can be Temporary, Limited or Plenary.
- Is only revocable when an individual can produce proof that they have regain capacity.
- The Mental Health Directive is included in the Guardianship.
- It is a judicial order.
- Judicial oversight and guidelines for Guardianship.
It is always better to be proactive than reactive. Planning for your future needs can keep you independent longer and be more cost effective. If you put a Power of Attorney in place with someone you trust and you provide them with a detailed account of what you want (or don’t want), you are more likely to be cared for the way that you want and your money will go farther. Our Life with Dignity service offering can help you plan your future the way you envision it should be.
If you don’t have a Power of Attorney or a Mental Health Directive and you become incapacitated then anyone who has a vested interest in your welfare, whether family or friend, can petition the court for Guardianship. This gives you less choice of care givers and puts you at higher risk of not having your choices honored, potentially jeopardizing your independence and financial well-being. In many cases, when someone gets Guardianship, the wishes of the individual cannot be determined, and the ward is subject to what the guardian feels is in the individuals best interest. Guardianship proceedings in themselves can be very costly. A contested Guardianship is even more costly.
When referring to Power of Attorney for the Person or of the Property vs the different types of Guardianship, you are basically referring to managing an individual personally and financially. So let’s look at the differences:
Difference between Power of Attorney for Healthcare and Plenary, Limited Temporary Guardianship
In a POA for Healthcare your designee can make any decision for you without a court order. Once an individual has been declared by a physician to lack competency you simply have to present your Power of Attorney paperwork. However, with a Guardianship you have to follow the court order. Both types of Guardianship give certain or all power to act on the individual’s behalf; however, anything outside of the court order has to be approved by the court. For instance: if someone has a stroke, becomes dependent on life support and it is not in the court order, it is always a best practice to go to court to make the decision whether to end life or not. This protects the Guardian as well as the Ward. In addition, the Guardian of the Person has to file an annual report with the court as a status update affirming continuation of the Guardianship.
Difference between Power of Attorney for Property and Guardian of the Estate
It is a known fact that our ability to reason becomes compromised as we get older. In fact, studies suggest in some people it can be as early as 65. Having someone you trust to manage your financial affairs can prevent you from being exploited, provided the person you choose is of sound integrity. Sadly, I have seen many cases where the individuals have been exploited by the Power of Attorney. Transparency and proper accountings are two ways a POA can avoid these issues. I recommend when choosing the POA for property, to pick someone that is good with their own finances if you want to ensure the safety of your financial future.
A Guardian of the Estate has little room to exploit anyone
They have to account for every penny that is spent of your money. The court requires the guardian of the Estate to produce a yearly report and to provide the court with an annual budget. The court will readily pick a family member or close friend over a Corporate or Public Guardian. It is standard practice for family members to contribute to the welfare of their loved one, while a Corporate Guardian or the Public Guardian charge for their services. For this reason, when the court determines someone is not of sound mind, the court will default for family or a loved one to be the Guardian if appropriate.
Mental Health Directive
The state of Illinois requires a Mental Health Directive in addition to a Power of Attorney for Healthcare for treatment of a Mental Health Disorder. I won’t go into the why’s or the politics around it, that is fodder for another blog (next month). Nonetheless, please note that if you are preparing your estate, this should be a consideration when putting your directives in order, regardless of whether you suffer from a mental illness or not.
Your Power of Attorney should know where you keep all of your important documents, and above all be transparent. This way if ever anyone wanted to challenge your POA’s intentions or abilities you have everything documented. NOTE: POAs for Healthcare can easily be revoked, however, Power of Attorney for Property cannot.
Guardians are mandated to do all of the things a Power of Attorney does and are appointed by and accountable to the court. A physician’s report as to whether or not the individual is capable of making their own decisions is a requirement of a petition for Guardianship but ultimately the court, not the medical professional makes the determination and the designation.
When Living Life with Dignity is appointed as a Guardian or a Power of Attorney we store all of our clients’ records on digitallifecloud.com. It is a HIPAA compliant cloud that allows you to share documents with doctors, caregivers or anyone that may need to help your POA. You can have everything from family pictures to your final arrangements stored and shared.
Read the latest press release about Digital LifeCloud and get a free gift package: Digital LifeCloud Press Release 120617
Ensure your future
Get a sound estate plan done and share the documentation with your designated Power of Attorney. You don’t have to give them access to everything just let them know where you keep it in case of an emergency. You’ll save money, time and most of all heartache.
For more information on Power of Attorney and Plenary Guardianship, read the following :
Do you have any questions about the difference between Plenary Guardianship and Power of Attorney? Post a comment to get the conversation started or contact us for more information.