When family members become disabled, someone needs to have official, legal authority to take care of their finances, make medical decisions, and generally step into their shoes. There are two legal ways this can be set up. One way is done in advance, while the other can’t be done unless they’re disabled.
Advance Planning With a Power of Attorney
Power of attorney is a legal document signed by someone who is not at the time disabled, naming one or more persons to serve as their “Agent” under the Power of Attorney if that is ever needed. Most often, it will be needed if the person is not able to handle their own affairs, whether temporarily or permanently. Unless the person specifically authorizes the Agent to act on their behalf, or their doctor certifies in writing that they’re disabled, the Power of Attorney cannot be used. You may sometimes hear the Agent called “Attorney-in-Fact,” but the person receiving the power of attorney does not need to be an attorney in occupation. This person acts as the agent who carries out legal, medical, or financial decisions for the grantor.
What is guardianship?
Guardianship is a more formal process where a judge appoints someone to serve as guardian over someone else, once it’s proven in court that they’re incapable of taking care of themselves. If a person can’t make good decisions any more but never set up a Power of Attorney, a guardianship is the only option. Getting guardianship requires filing for a petition through a probate court. There is no guarantee the Court will approve every guardianship, and it will want to know whether any other alternatives can provide care for the individual without the need of a guardian.Since disability has a wide spectrum, the Court may set up a limited guardianship instead of a full guardianship. The Court can also name different people as guardians: one for financial matters, and one for personal and medical decisions. The Guardian must file an annual report to the court, and cannot mingle their finances with the disabled person’s finances. In many cases, a professional will serve as Guardian, if there are no qualified persons available or the situation calls for professional involvement.
Do I need guardianship or power of attorney?
Everyone needs to set up a power of attorney document. We often prepare Powers of Attorney for young people going off to college (in fact, colleges are now recommending this to incoming students. You need to have your Power of Attorney in place because (a) you never know when an illness or injury will render you unable to function for a while, and (b) a Power of Attorney costs far less than a court Guardianship proceeding.
Now for the practical side of Powers of Attorney. First, make sure your helpers know where you’ve stored the Power of Attorney. Also, make copies (the original is seldom needed) to avoid the crisis of a lost document. Secondly, “once and done” doesn’t apply here – the banks and financial companies are not fans of old documents. In fact, they may not let you use the Power of Attorney if it’s too old (by their rules). That is not a problem you can afford to have! We recommend updating your Power of Attorney every five years or so, even if nothing is changed except the date.
Can The Agent Change the Will?
You can’t make any changes to their Will if you are acting under a Power of Attorney. If the court appointed you as Guardian, you can present your case to the judge, who may or may not allow you to change the Will. Technically, if the disabled person has a Revocable LIving Trust, you may be able to make changes to its terms, but (for your own protection, if nothing else) you need to work with an estate attorney, and even then, depending on the degree of change you plan to make, you might want to get a judge to approve it.
Whether you require guardianship, or power of attorney, HighPoint Law Offices is here to help you through the process. Contact us today for more information and to schedule a consultation.
