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OWM Blog – Power of Attorney vs. Guardianship

power of attorney vs. guardianship

If you or a loved one becomes disabled or incapacitated and there is no power of attorney in place, then a guardian may need to be appointed by the court to care for you and manage your financial affairs.  Upon appointment of a guardian, you lose certain legal rights to act on your own behalf, and the guardian will be empowered to act for you.


Power of Attorney vs. Guardianship: How to know what you need

You must have the requisite legal capacity to sign a Power of Attorney. If you become incapacitated and have not previously signed a Power of Attorney, it is often too late. At that point, a spouse, relative, or friend will need to petition the court alleging that you are incapacitated and request to be appointed as your guardian. A guardianship proceeding can often be avoided where proper planning is done prior to the incapacity. However, where an individual is born with a disability, and upon turning eighteen does not have the legal capacity to sign a power of attorney the guardianship proceeding is often necessary.

What is a Power of Attorney?

A power of attorney is a legal document prepared by an attorney on your behalf. The power of attorney is effective during your life, upon you passing away the document is no longer operative.

Pennsylvania law recognizes a health care power of attorney and a durable power of attorney.

A durable power of attorney is a power of attorney by which an individual, referred to as the principal, designates an agent to act on his behalf. The principal specifically designates in the written document the powers that the agent can exercise. The powers granted can be used by the agent regardless of the principal’s subsequent incapacity or disability.

A health care power of attorney allows an agent to make decisions regarding the principal’s health. However, this document is operative only when: (1) a copy is provided to the attending physician; and (2) the attending physician determines that the principal is incompetent.

What is Guardianship?

A Guardianship is obtained in Pennsylvania through the orphans’ court division of the court of common pleas in the county that the alleged incapacitated person resides. To be appointed as an individual’s guardian, the individual must file a petition with the court and provide medical evidence from a treating physician of the individual’s incapacity. A hearing is then held and evidence must be presented to show that the individual is incapacitated and that there is not a less restrictive alternative to the guardianship. The court then issues a decision appointing a guardian and declaring the individual incapacitated. The Guardian is thereafter empowered to make all decisions regarding the incapacitated person’s care and financial management.

What is the difference between a guardian of the estate and guardian of the person?

A Guardian can be appointed as Guardian of the person or Guardian of the estate for the incapacitated person. The Guardian of the person is responsible for the incapacitated person’s housing, safety, and healthcare decisions, while the Guardian of the estate is responsible for the incapacitated person’s finances.

In most situations, the Guardian of the estate is permitted to spend the incapacitated person’s income for their required needs. However, the Guardian is not permitted to spend the incapacitated person’s principal assets without court approval. For example, if the incapacitated person is admitted to a nursing home and their monthly income does not cover the nursing home costs, the Guardian would be required to obtain court approval before using the incapacitated person’s principal assets to pay the nursing home bill.

Additionally, both the Guardian of the person and the Guardian of the estate are required to file annual reports with the court regarding the status of the Guardianship. Also, a final report is required to be filed with the court upon the death of the incapacitated person.

Can a guardianship be revoked?

Unlike a Power of Attorney in which you can revoke your agent’s power to act as long as you have the requisite mental capacity, a Guardianship can usually only be terminated if the incapacitated person regains capacity or he or she dies.

How do I avoid a guardianship?

A Guardianship is a more restrictive tool in dealing with incapacity than a Power of Attorney. A Power of Attorney gives you more flexibility, and usually there is no involvement by the court.

It is often possible to avoid the guardianship process in Montgomery, Chester, & Berks County PA if you plan ahead. Please contact our office and we can guide you through the planning that should be done now, in order to avoid the cost of a guardianship later in life.

If you have a family member that did not sign a power of attorney and is currently unable to make health care decisions for themselves and/or requires help with financial matters, please contact our office as we can assist you through the guardianship process.

— Written by Rebecca A. Hobbs, Esq., CELA*

*Certified as an Elder Law Attorney by the National Elder Law Foundation as authorized by the Pennsylvania Supreme Court.

DISCLAIMER: The contents of this blog are not legal advice, and are not to be used for that purpose.  If you are faced with a legal matter, you should contact a lawyer immediately in order to ensure that you are protected.

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