The terms “guardianship” and “power of attorney” are mostly heard when dealing with a family member or loved one who’s incapacitated. But what’s the difference between the two? Are they the same thing? Who needs a guardianship and who needs a power of attorney? When should I get a power of attorney vs a guardianship?
A guardianship is a legal process that gives one person the ability to make decisions for another person. These can be obtained for either an incapacitated adult or a minor child. A Power of Attorney is also a legal tool that gives one person (the agent) the ability to make decisions for another person (the principal). It is a legal document that is usually drafted by an attorney. Historically, a power of attorney became ineffective when the principal became incapacitated. However, most individuals who use powers of attorney for estate planning purposes opt for a “durable” power of attorney. A durable power of attorney remains effective even after the principal has become incapacitated. A person becomes incapacitated when they are unable to make their own financial and healthcare decisions.
So what’s the difference?
A Guardianship can be established when an individual is no longer able to make their own business and financial decisions. Guardianships in Alabama can only be obtained through the court system, and a judge decides who the guardian will be. Generally, a guardianship is used when there are no less restrictive means to make decisions on behalf of an individual.
A Power of Attorney, on the other hand, is created while an individual still has the ability to make his or her own business and financial decisions. The principal can decide who will be his or her agent, when the power of attorney will become effective, and what matters his or her agent can address on their behalf. The principal must, however, have a sound mind when executing this document. If you become incapacitated before you’ve had a chance to have a power of attorney drafted and you happen to need certain business and/or financial decisions made on your behalf, then someone will have to be appointed as a guardian by a court.
The main difference between the guardianship and a power of attorney is that a guardianship takes away the right of the individual to make decisions, while a power of attorney permits another to make decisions in conjunction with the individuals’ choices. There are times when it is necessary to remove the right to make poor decisions.
If I have a power of attorney will I still have to have a guardian appointed for me?
The answer depends on whether the Power of Attorney document is sufficient to meet all the needs of the incapacitated person. You might need a guardianship when a Power of Attorney is limited or not sufficient and doesn’t address certain matters that can be handled on behalf of a principal. In this case, you would need a Guardianship over the person in order to make decisions for them.
Another reason you might need a guardianship is when you have a Power of Attorney, and you need to protect an incapacitated person from being taken advantage of. A Power of Attorney allows another individual to make decisions on behalf of another person jointly. A guardianship goes one step further and takes away an incapacitated person’s rights to make individual decisions on their own.
Contact the Law Office of Rodney Davis, PLLC at (205) 578-1597 to speak with a lawyer who handles guardianships and powers of attorney. Our office can help you determine whether your Power of Attorney document is sufficient and whether you might also need a Guardianship.