Guardianship and Power of Attorney – What’s The Difference?

A Power of Attorney refers to written authorization that enables a person or trustee to control another’s financial and legal decisions. The principal will appoint someone they trust to make such determinations.

Examples of circumstances a Power of Attorney is used:

-          Signing legally binding documents;

-          Operating bank accounts;

-          Collecting rent;

-          Buying and selling real-estate;

-          Paying bills; and

-          Managing investments.

There are two types of Attorneys:

1. General Power of Attorney.

2. Enduring Power of Attorney.

The General Power of Attorney focuses singularly on managing financial matters whilst a person is still of sound mind. It ends once you lose the capacity to make those decisions.

On the other hand, the Enduring Power of Attorney is made by a person of sound of mind for assurance that in the situation they are incapacitated or unable to make decisions, their assets are taken care of. Ultimately, it allows a person to control the financial and legal decisions of a person whilst they are unable too

Guardianship is like a Power of Attorney in that they are both legal documents that provide a person with the power to act on the behalf of another person who is unable to make their own decisions. It is usually due to being a minor or having decision-making disabilities. It is also used in situations where a person is susceptible to undue influence or fraud.

Guardianship is different to Power of Attorney being that it revolves around a person’s living and lifestyle arrangements, medical and dental decisions, as well as healthcare.

A guardian must ensure that the emotional, social, cultural, and spiritual needs are met. They must also determine and monitor residence, consent to, and monitor medical treatment, decide upon, and approve non-medical services such as education and counseling and make end-of-life decisions. However, Guardianship disallows control over a person’s financial decisions.

What are the key differences between a Power of Attorney and Guardianship:

A Power of Attorney allows a person to choose the person handling the financial and legal decisions although only when in a sound state of mind. Under Guardianship, the guardian is decided by the judge. Therefore, the amount of control a person has over who makes their decisions differs. Additionally, a Power of Attorney is less costly and expensive than Guardianship due to guardianship proceedings requiring two doctors and at least two lawyers as added expenses.