Power of Attorney vs. Guardianship

So, here you are taking care of Momma and her decline is rapid. You realize that if her decline in health continues, that she may soon be unable to make decisions for herself. You have heard you may need a Power of Attorney or a Guardianship in the event she loses capacity. If Momma loses Capacity, she will be legally unable to make decisions. So, which is better for you – Power of Attorney or Guardianship?

We receive this question almost every week. Even though this is an old question to us, it is very new and fresh to many. Your Mom has started to decline in health suddenly before your very eyes; you know you’ve got to act quickly and you need to know the appropriate action to take. So in this week’s blog, we are going to explain some of the basic features of Powers of Attorney. Next time, we will discuss Guardianships. Then, we will compare the two; discussing how to decide which one is appropriate for you and your loved one in your present situation.

Powers of Attorney

A Power of Attorney is basically a permission slip. Someone gives you authority to make decisions for them if they become incapacitated and unable to make decisions for themselves. The principal is the person granting the power; the agent receives the authority.

A Power of Attorney is not a standard document. Some Powers of Attorney grant the agent a broad amount of power. In others, the granted powers are more limited. Let’s look at General vs. Limited Powers of Attorney.

Limited Power of Attorney

A common example of a Limited Power of Attorney occurs in real estate. Often, travelling business executives will grant a Limited Power of Attorney to their spouse if they’re selling their home. Likewise, members of the Armed Forces use a Limited Power of Attorney if their family is planning a move. The local spouse can complete closing documents without having the out-of-town spouse physically present. In this example, Power of Attorney is limited; the one receiving the power only has the authority to do what was specifically stated in the document itself.

General Power of Attorney

A general Power of Attorney is usually much broader. This is the one that we typically would use in a situation described at the beginning of this article. A general Power of Attorney would grant (usually one of the adult children) the power to take any actions for their declining parent that the parent could take for themselves if they were able to act.

In the past, a Power of Attorney could be very brief and to the point. “Back in the day”, it was common to see one-page Powers of Attorney. The child simply received authorization to act on behalf of their parent. These types of documents are usually not effective in today’s world. Most places want to see specifically that the agent’s authorized to take the attempted action on behalf of the principal. Therefore, Powers of Attorney are typically much longer documents; the agent will have been specifically authorized to take a number of actions on behalf of their Loved One.

Immediate or Springing Powers of Attorney

Powers of Attorney can be immediate or springing. An immediate Power of Attorney immediately authorizes the agent to act once the principal signs the document. The advantage, of course, is the immediate effectiveness of the document; the agent does not have to take any further actions to make the Power of Attorney effective.

Contrarily, a springing Power of Attorney becomes effective upon the occurrence of a specific triggering event defined within the document. A typical “triggering event” would be letters from two separate doctors. These doctors will independently need to find the principal unable to manage their business affairs due lack of capacity.

Generally, a springing Power of Attorney is thought of as safer for the Principal. The agent has no immediate authority to act on behalf of the principal. Authorization to act on the principal’s behalf will occur sometime down the road if and when the principal becomes incapacitated.

On the other hand, a downfall of springing POA is if the principal does become incapacitated suddenly. When the agent needs this Power of Attorney quickly, they must find two doctors that can examine the principal. Those doctors must then write letters stating that the principal meets their definition of incapacity as stated in their document. Sometimes it is difficult to find doctors to write such letters on short notice. As a result, the agent is unable to act until obtaining such letters. In an emergency situation, where quick action is needed, a springing Power of Attorney can delay the agent’s active authority.

When Power of Attorney is needed Most

The place we see the need for a good Power of Attorney the most is when a person checks into a Nursing Home. Hopefully they already have a good Power of Attorney in place before they check in. If not, and they still have capacity, they may be able to do one at the last minute. This is yet another reason to get this little planning detail checked off your list before it’s too late! To see when this may make a difference, read our blog article on Getting Medicaid to Pay.

Spoiler Alert

Next time, we will talk about Guardianships. At the same time, we will compare the pros and cons of Powers of Attorney versus Guardianships. Needless to say, a good Power of Attorney is almost always quicker, easier, and cheaper than obtaining a Guardianship. The only way to obtain Guardianship is through court order. However, we will discuss Guardianships in much more detail discuss when a Guardianship is absolutely necessary.

In the meantime, download our Power of Attorney vs. Guardianship Comparison Sheet today.

The best tool for your situation can only be determined after exploring of all elements of your situation. Your best bet is to meet with your Elder Law Attorney to discuss the specifics of your situation. If you do not have a Power of Attorney please contact an attorney for assistance. This is much too important to relegate to a free download from the internet.

Best wishes as you take steps to discover and implement these important planning choices for your future care needs.