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

People often have questions about the difference between power of attorney and guardianship. Their confusion is understandable because the two designations are nearly identical! 

The biggest difference between the two is that power of attorney is granted by the person who wishes to have their affairs managed under certain conditions or situations. Guardianship, however, can only be granted by the courts, who will determine the appropriate scope of decision-making the guardian will have in the protected person’s life.

Because power of attorney is something you would have control over — unlike guardianship — it is highly advisable to anticipate situations where you may need to designate someone to act on your behalf. Otherwise, you may find yourself in a situation where the court could rule that you lack capacity, giving someone else control over important aspects of your life, temporarily or permanently.

Determining who will have a durable power of attorney and under what circumstances is a critical component of estate planning and the formation of your advanced healthcare directives. It is highly important to review your intentions and available options with the help of an experienced estate planning lawyer in New Mexico. An attorney can inform you of the decisions you have available and help you put your intentions into legally binding words that can apply to a variety of likely scenarios.

To learn more about power of attorney, guardianship, and similar matters, read on, and then contact our firm at (505) 503-1637 or contact us online.

How Does Power of Attorney Work?

When exploring the legal concept of power of attorney, the important thing to recognize is that it can refer to a broad range of possibilities and situations. You can, in fact, have multiple people designated to have power of attorney, and they may wield the power to make decisions on your behalf in various life areas at the exact same time.

When drafting a power of attorney document, the important factors to consider are:

• When do I want power of attorney to be activated? Example: when I’m under surgical anesthesia vs. when I’m medically in a coma for more than a week.

• What aspects of my life do I want the person with power of attorney (your agent) to have the ability to decide? Example: running your business while you are in surgery vs. deciding whether or not to use experimental therapy to revive you from a coma.

• Who do I want to act as my agent? You can specify power of attorney for different areas of your life. The most common agent types are medical power of attorney and financial power of attorney. Agency cannot overlap, meaning two different people cannot both serve as your agent for the same type of decision, so pick and choose carefully.

• How long do I want this person to have power of attorney? Do I want to limit it to a few weeks or months? Do I want them to have this power until I regain capacity? Do I want it to last until my death?

• Why have I made my decision, and do my choices reflect my intentions and a likely reality I may someday face?

Terms and Conditions for Durable Power of Attorney

Generally, power of attorney designations become active immediately unless they are delayed by a specific time frame or stipulated to activate under certain conditions. Review any stated conditions carefully to ensure that they will cover the intended situation and not create uncertainty as to whether they should be activated.

Power of attorney used to only last for a certain amount of days, but most states now allow for durable power of attorney that can last indefinitely. Again, be sure to carefully review your designations when deciding whether or not to use a durable power of attorney.

Finally, be cautious about the person you select and be certain that they will be capable of carrying out the expected duties. Revisit your decision every few years. The person you choose must be both trustworthy and dependable. They will act in the role of fiduciary, meaning they have a legal obligation to hold your best interests and stated wishes in mind. If they act in their own interests instead, they can be held accountable under a breach of fiduciary duty complaint. However, if someone is incapable of managing the responsibility, they can not only fail you but be in breach of their fiduciary duty, as well.

Importantly, power of attorney must be granted while the principal still has full medical and legal capacity, meaning their cognitive condition cannot be in question. This requirement is why it is so important to plan ahead and designate someone. Otherwise, your loved ones and the court will have to go through a lengthy guardianship proceeding to have someone appointed.

How Is Guardianship Different From Power of Attorney?

Guardianship is a nearly identical legal concept to power of attorney, except the court determines the appropriate guardian and the scope of decision-making powers they have over the protected person. 

Importantly, the guardian is in charge of legal decisions whereas the court must appoint a conservator to make financial decisions. Someone can be both guardian and conservator, and sometimes just one type of agent is appointed but not the other. Regardless, the courts typically refer to both under the legal umbrella of “guardianship”.

The Guardianship Process, in Brief

Someone who intends to be a guardian can petition the court to begin hearings that could allow them to be designated. Typical examples of someone who petitions to be a guardian include family members or close friends and business partners. A lawyer can be designated guardian, as well, as can a professional services provider that specializes in assigning guardians.

The purpose of guardianship hearings is to establish that the allegedly incapacitated person actually lacks capacity and also to establish that the petitioning guardian is capable of fulfilling their duties. If there are dire circumstances, like an immediate medical decision must be made, it is possible for the court to designate a temporary guardian for a designated amount of days (typically 30). This temporary status can be renewed if there is a proven need to do so.

Guardianship hearings begin with the designation of a guardian ad litem (GAL), a qualified healthcare professional, and a court visitor. All three will make an evaluation of the person who would be protected to determine what aspects of capacity they do and do not have. 

The GAL is intended to act on behalf of the alleged incapacitated person’s best interests and to oversee the entire process of appointment. They will interview the person to be protected to determine their own positions and feelings on the matter. The GAL will also interview the qualified healthcare professional and the court visitor as well as the proposed guardian. They may obtain an independent medical or psychological assessment if they feel it is necessary. When all information has been heard and considered, the GAL submits a written report that will be used as the foundation for the assigned judge’s final decision at the hearing on the petition for appointment.

Guardianship Involves Making Decisions for a Person They Could Have Made Themselves

At the conclusion of all hearings, the judge will determine what aspects of capacity the protected person may or may not lack. They will also provide a window for how long the guardian is expected to serve, which may be temporary, long-term, or permanent.

Overall, the judge on the guardianship appointment case is expected to “render a decision that gives the Incapacitated Person (IP) the most autonomy and is the least restrictive method to protect the Incapacitated Person.”

Further, the person who has been incapacitated ” retains all legal and civil rights except those which have been expressly limited by court order or have been specifically granted to the guardian by the court.”

In other words, the court will determine which areas of the protected person’s life that they are incapable of managing on their own, within the most limited scope possible.

Ultimately, the guardianship appointment process can be lengthy, expensive, and still result in a large amount of guesswork on the part of the court and the GAL to interpret the best outcome for the allegedly incapacitated person. It is almost always preferred by this person to be able to make these determinations on their own, in advance of any sort of diminished capacity, so that their own wishes can be explicitly understood and carried out.

Plan Ahead for Situations for Which You May Need Power of Attorney With a New Mexico Estate Planning Lawyer

With proper estate planning and the formation of your advanced healthcare directives, you should be in a good position to have plans for all of the worst-case scenarios. Rather than having to rely on a process that is designed to interpret your best interests and personal wishes, you will have documents directly stating what you wish to happen on your behalf. 

Put another way, planning ahead for power of attorney can save both you and your loved ones a significant amount of time, money, heartache, and stress. You should also continually revisit your power of attorney documents and other advanced planning to ensure they are up-to-date and reflect your current situation as well as your current sentiments.

Get answers to your questions, and start the process today when you call (505) 503-1637 or contact us online to speak to an estate planning attorney near you.