A power of attorney and guardianship both give an individual or entity the ability to make decisions for another person. But what are the differences?
The power of attorney is a valuable estate planning tool that enables another individual to make financial decisions in your stead at any time, for example, if you become incapacitated or, for some other reason (such as traveling out of the country), are not able to sign necessary documents. The individual, referred to as the “agent” or “attorney-in-fact,” can be a friend, spouse, relative or any other trusted person and may, for instance, be called upon to sell real estate, withdraw money from a bank account, or pay bills. Although you must have capacity at the time you execute your power of attorney, it remains valid in the event that you become incapacitated.
How is guardianship different? Guardianship, which requires court authorization, is only granted when incapacity exists. It encompasses much broader powers than a power of attorney, extending beyond financial decisions to health care and personal affairs, such as routine medical treatment and living arrangements.
With a guardianship, the court will appoint a court evaluator, an impartial person who investigates the issues and reports his findings to the court. The court also conducts a hearing, with witnesses in attendance, during which the court determines whether or not the individual in question needs a guardian and who that guardian should be. Although a friend or family member may petition a court to become someone’s guardian, sometimes the court chooses a financial institution or guardianship agency instead.
To learn more about New York elder law, New York estate planning, visit http://www.elderlawnewyork.com
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