Hyden, Miron & Foster, PLLC Law Blog

Thursday, April 14, 2022

What is the Difference Between a Guardianship and a Power of Attorney?

Having a loved one reach a point where they need assistance handling their own affairs can be difficult. The situation may happen suddenly or you may realize the state of things gradually. Regardless, when a love done needs this kind of help, there are only a certain number of legal options you have available to put the tools in place to provide them with the assistance they need. The longer you wait, the more limited your options may become. Two of the primary ways of putting a structure in place to allow a person to assist a loved one in the management of their affairs is through a guardianship or a power of attorney. Here, we’ll discuss these two legal arrangements in more detail and discuss how they are different.

What is the Difference Between a Guardianship and a Power of Attorney?

Before going into the differences between a guardianship and a power of attorney, it’s a good idea to get a basic understanding of what these two legal tools actually are. A guardianship is established through a formal court process. In a guardianship a legal relationship is established between a guardian and the ward. The ward is the person who needs assistance managing their affairs. The guardian is appointed by the court and, in doing so, the court is granting the guardian control over not just the ward’s property, but other matters including finances and health care decision making.

While guardians are granted fairly wide discretion regarding the protection of the ward and the ward’s assets, the guardianship relationship is still court-supervised. Furthermore, there are certain decisions that the guardian is not permitted to make without first getting the court’s written permission. The guardian must also submit annual reports to the court which include the status of the ward as well as the status of the ward’s affairs.

A power of attorney, on the other hand, is a legal tool put in place during the estate planning process and does not require the involvement of formal court proceedings. In a power of attorney, the principal, the person creating the power of attorney, authorizes an agent to act on their behalf regarding certain specified matters. The agent may be authorized for general or broad powers, or the powers may be more specific and include things such as everything from the authority to participate in a specific transaction on the principal’s behalf, to broader powers involving finances, property, or health care decision making authority. A durable power of attorney will survive the incapacitation of the principal and, therefore, can help avoid the need for a guardianship to be established as the power of attorney may be enough to help the principal manage and protect their affairs.

If you were thinking that a guardianship seems stricter and more involved than a power of attorney, you would be right. A power of attorney is much less restrictive and permits the principal to still participate in the management of their own affairs. While a guardianship involves public court proceedings, a power of attorney is privately established. No court supervision is required in a power of attorney arrangement. Furthermore, establishing a power of attorney allows the principal to purposefully select their agent whereas in a guardianship, the court will make the guardian selection, not the ward.

Arkansas Estate Planning Attorneys

A power of attorney is preferable to guardianship for all the reasons discussed above. Through planning now, you can help avoid the need for guardianship to be established. Put those critical legal protections in place now. The dedicated estate planning team at Hyden, Miron & Foster can help you. Contact us today.

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