Many people get confused about the difference between guardianship, health care powers of attorneys, and financial powers of attorney. Let us take a look at the three different legal tools.
What is guardianship?
Guardianship gives someone else the right to make decisions on your behalf. It is typically awarded by a court if illness or an accident leaves you incapacitated. You can also apply to be granted it over a loved one, be it when your child with special needs turns 18 or your dad starts to suffer from mental illness.
What is a health care power of attorney?
You give someone the power to make decisions about the medical care you receive. It can come into play if you have an accident, such as a car crash that leaves you in a coma. Or if you develop a mental illness such as Alzheimer’s, which affects your ability to understand the information you receive and use it to make decisions.
What is a financial power of attorney?
A financial power of attorney gives someone the authority to make financial and legal decisions on your behalf. There are various types available. The most useful one for most people is a Durable Financial Power of Attorney because it is there if it is ever needed. Typically you would name your spouse or another close family member. It allows them to carry out essential tasks such as accessing funds to pay the bills.
Naming a power of attorney puts you in control
A court will award guardianship over you if it deems you incapable of looking after yourself. You will have no say in the matter. By contrast, if you nominate someone to have power of attorney, you get to choose who it is. It is something you put in your estate plan in case you ever need it. Setting it up in the correct legal manner is essential to avoid there being problems later. Seek legal help to do so.