Comparing Power of Attorney with Guardianship
This edition of the Koldin Law Center E-Newsletter is part of a series about frequently asked questions comparing legal documents, legal roles, and government benefits.
All prior newsletters are saved on our website. You can read them by clicking here.
We receive many questions from clients and readers of our newsletter asking about the differences between various legal documents, legal roles, and government benefits. In this newsletter we compare the difference between a Power of Attorney and a Guardianship.
Power of Attorney
A Power of Attorney is an important legal document where you give your agent(s) (person you appoint to serve on your behalf) the legal authority to handle your finances and make other decisions on your behalf.
Your agent appointed in your Power of Attorney does not have the authority to make medical decisions for you.
As discussed in the previous newsletter, the Koldin Law Center, P.C. has prepared an enhanced Power of Attorney that includes a thoroughly completed modifications section that provides additional broad gifting powers we feel are important if a catastrophic illness occurs and to allow continued support for the healthy spouse.
For more information on Powers of Attorney, please visit our website by clicking here.
If you become incapacitated in the future and have not signed a Power of Attorney, a costly and time consuming Guardianship proceeding may become necessary.
Guardianship
If you become incapacitated and are unable to manage your affairs, your Health Care Proxy and your Power of Attorney can handle your affairs. However, if you do not have a Health Care Proxy or Power of Attorney, then a Court appointed Guardian could become necessary.
A Guardianship proceeding can be costly and time consuming. Also, the proceeding requires evidence to be presented of your incapacity. The proceeding leaves it to the Court to determine who will be appointed to handle your affairs and the Court also determines what powers to grant your Guardian.
A Health Care Proxy and Power of Attorney allow you to decide who to appoint and what powers to grant. A Guardianship leaves all decisions to the Court.
Example 1: Tom and Mary Jones are married. They are 75 years old. They have never met with an attorney before. They have 2 children ages 45 and 50. Tom has dementia and is no longer competent. Tom and Mary have not done any estate planning.
Example 2: Tom and Mary Jones meet with an Elder Law attorney. They are 65 years old. They have 2 children ages 35 and 40. As part of their estate planning, they signed Powers of Attorney and a Health Care Proxy. Ten years later, when they are 75 years old, Tom has dementia and is no longer competent.
Examples 1 and 2 have the same facts except that when Tom became incompetent in Example 2, he had agents appointed to handle his affairs as part of his estate planning with his Elder law attorney. In Example 1, Mary and his children do not have the authority to handle his affairs.
In Example 1, in order for Mary to obtain access to Tom’s bank accounts and retirement funds along with anything else that is titled in Tom’s name alone, such as a Social Security or Pension check, she will need to go to Court and become appointed as his legal Guardian over his financial and personal/medical affairs. This is a time consuming, invasive and costly process.
In Example 2, since Tom appointed Mary as his Power of Attorney, Mary has the authority to act on Tom’s behalf to access his financial institution accounts.
Also, if the Power of Attorney contains important additional powers such as the power to make gifts, Mary will be able to transfer funds from Tom’s accounts to herself to pay for her living expenses.
In Example 2, since Tom appointed Mary as his health care agent under his Health Care Proxy, she will be able to make medical decisions for him. If the Health Care Proxy contains the necessary language, Mary will also have the authority to remove life support, feeding tubes and hydration.
Another advantage of a Power of Attorney and Health Care Proxy is that it allows you to appoint alternate agents to serve. Rather than leaving it to a Court in a Guardianship proceeding to determine what is in Tom’s best interests, Tom can make his wishes known and authorize his agent(s) and alternate agent(s) to act on his behalf.
Also, Tom can spell out what authority his agent(s) and alternate agent(s) are being granted in the Power of Attorney and Health Care Proxy.
At the Koldin Law Center, P.C., located in East Syracuse, New York, we have over 50 years of experience helping individuals plan for immediate crisis and long term care.
The Koldin Law Center, P.C. limits its practice to the specific field of Elder Law which includes estate planning and Medicaid law.
Our attorneys are available to discuss your estate planning options, including the advantages and disadvantages of Revocable Trusts and Irrevocable Trusts, along with other estate planning considerations including a Will, Power of Attorney, and Health Care Proxy.
When the Koldin Law Center, P.C. handles a Medicaid case, we not only handle the entire application process, but we also review asset protection options with our clients. We review with our clients who are already in a Nursing Home options to protect some or all of their assets beyond merely establishing Medicaid eligibility.
We do not charge a fee for the initial consultation. We welcome your children, family attorney, accountant, and/or financial planner to be present at the initial consultation.
There is something you can do.
Our Attorneys are available to speak to your organization
Our Attorneys speak to groups throughout New York State as a public service. If you would like to arrange for one of our Attorneys to speak to your group, please contact our office.
We appreciate your referrals
We have been told by many clients who are in a crisis that they wish they had known about our firm much sooner. We are proud of the many families we have helped in times of crisis.
We are also proud of the many families we helped avoid financial crisis by doing estate planning in advance.
We all share the responsibility for making our family and friends aware of the planning options available to them.
Your referral to the Koldin Law Center could make a major difference in the lives of your family and friends if they are someday faced with a long term illness.
Remember that the Koldin Law Center offers many services for clients of all ages. Our services range from basic estate planning such as a simple will to complex estate planning including asset preservation planning.
THERE IS NO FEE FOR THE INITIAL CONSULTATION
