Differences between Powers of Attorney and Guardianship

If you find yourself in a position in which you need to act on behalf of another adult, like a parent, spouse, or adult, you need legal authority to do so. Two mechanisms for gaining such authority in Michigan are power of attorney and legal guardianship.

What’s the difference?

The biggest difference between a power of attorney (POA) and a guardianship is whether there is court involvement. A power of attorney is nothing more than a written, notarized document giving one person, an agent, authority to act on behalf of another. The scope of that authority is determined by the terms of the document. Often the authority is financial in nature. When the scope of such a POA is broad, allowing the holder to make any and all financial decisions, it is known as a general power of attorney; when circumscribed in scope, it is a limited power of attorney.

The power of attorney can be created to take effect immediately. This is what’s known as a durable power of attorney. If the person granting the authority prefers not to confer it on their agent until such time as they are incompetent to act for themselves, the power of attorney is referred to as “springing.” That is, it springs into action only when needed.

In addition to financial POAs, there are also healthcare POAs. These are typically designed to take effect when a person is no longer competent to make healthcare decisions for him or herself.

Guardianships, unlike POAs, are created and supervised by the probate court. A guardianship is a legal relationship in which the guardian makes personal decisions for a dependent person (known as a “ward”), including housing and medical decisions. A conservator is someone who makes financial decisions for a ward and files regular accountings with the court. Often, a ward will require both a conservator and a guardian. One person may act in both capacities.

Guardianships and conservatorships are initiated by filing a petition in probate court. The ward’s incapacity to manage their own affairs must be proven, often by a written statement from a doctor.

Which one should I choose?

If you are planning for your own future, it is strongly recommended to create powers of attorney. This allows you to select your own agent and avoid the necessity of your family incurring expense and spending time on court proceedings to arrange for your needs. Similarly, if you have elderly parents or relatives who are competent to act right now, but who are concerned about future incapacity, they should be encouraged to create powers of attorney.

If you are concerned about a family member’s current ability to manage their affairs, and they are not willing or able to grant POA to an agent, it may be necessary to pursue guardianship and/or conservatorship.

 In either case, it is best to have a knowledgeable attorney to help prepare the documents, and, if necessary, assist with court proceedings and filings. If you have questions about guardianships or powers of attorney, we invite you to contact our office.