Power of Attorney vs. Guardianship: Which Option Protects a Loved One With Dementia?
When a loved one starts to experience dementia or Alzheimer’s, it can be a tough situation for families to decide on the best way to manage their finances, healthcare, and well-being. Alzheimer’s can slowly impact an individual’s capacity to pay bills, make medical decisions, or handle legal issues. When such cases happen, two legal remedies are often used: power of attorney and guardianship.
Although both remedies allow an individual to make decisions for a person who can no longer make decisions for themselves, they are used in very different ways.
What is a power of attorney?
A power of attorney is a legal document that enables an individual to appoint someone they trust to manage financial, legal, or medical issues on their behalf. The individual who grants the power is called the principal. The individual who receives the power is called the agent or attorney-in-fact.
Most estate plans involve the use of a durable power of attorney. This is one that stays in effect even if the principal later becomes incapacitated. The power of attorney can be used to give the agent the power to manage the principal’s financial issues.
There are also healthcare powers of attorney that enable an agent to make decisions on the principal’s behalf if they become unable to communicate.
The greatest advantage of the power of attorney is that it enables individuals to choose who they want to manage their issues if they become incapacitated. It also eliminates the need for court intervention.
What is a guardianship?
Guardianship is a legal arrangement that is usually established by the courts. When an individual is no longer capable of making their own decisions but does not have a power of attorney in place, then a family member or interested party may apply for guardianship in court.
When appointed, the guardian is responsible for making financial, medical, and other day-to-day decisions on behalf of the individual.
Guardianship is a legal arrangement that involves a formal legal process. The court must first declare that an individual is legally incapacitated for a guardian to be appointed.
Guardianship also requires that reports be filed with the court on any financial decisions that were made on the individual’s behalf.
Key differences between guardianship and power of attorney
The most significant difference is that in a power of attorney, the decision is made by the person, whereas in guardianship, the decision is made by the court.
A power of attorney is made voluntarily by an individual while they still have the mental capacity to sign legal documents. A guardianship is not voluntary but is forced on the individual by the court after they have already lost their mental capacity.
Guardianship is often time-consuming, expensive, and emotionally draining on families.
Talk to a Virginia Beach, VA, Elder Law Attorney Today
The Law Office of Angela N. Manz represents the interests of Virginia Beach residents looking to create an estate plan. Call our Virginia Beach elder law attorneys today to schedule an appointment, and we can begin discussing your next steps right away.