Power of Attorney: When Power of Attorney Controls and What It Can Do

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Does power of attorney override guardianship?

Power of attorney usually does not override guardianship. However, there are times that it will override guardianship, usually pertaining to financial matters. Power of attorney is when a competent individual grants authority to a chosen agent that will deal in financial affairs for the individual. A durable power of attorney will allow it to last even after the individual has become incapacitated. Although, once the person is incapacitated their family can seek to appoint a guardianship in order to make healthcare decisions for the individual.

To grant guardianship requires a difficult court process where the judge has to determine the competency of the individual before appointing a guardian. Guardians are appointed to protect the health and welfare of the individual. Guardianship comes with more authority. It means that third parties have to respond to a guardian. The court prefers power of attorney over guardianship due to the fact that guardianship takes more decision making authority away from the individual. Many times the duties between the two overlap. Both can grant authority to make decisions regarding financial affairs as well as healthcare decisions.

What can power of attorney do?

Power of attorney was briefly discussed above. Here, there will be a more in depth analysis of what it can offer. There are many things that it can do. It starts when a principal seeks an agent to act with the authority to make certain decisions for the principal. This authority passes in a legal document expressing the desire to pass some decision-making power. The principal can dictate to the agent what Bankruptcy Courtauthority can be exercised, and when that authority can be exercised. Most times the power given to the agent is conditioned on the principal becoming incapacitated. This is preferred over most other avenues of appointing decision making power.

In this situation, the principal does not have to deal with the court, the principal retains a lot of control in making decisions, it costs less than other options, and there is more privacy. It is also important to note that the principal can revoke the power at anytime.

To take a step further, there are usually two types of powers the principal can utilize. The first power is for medical decisions. The second power is for making financial decisions. Medical power allows the agent to make decisions pertaining to care once the principal has become incapacitated. Financial power allows the agent to make any financial decisions for the benefit of the principal. These two powers can be combined and given in full to the agent. However, there may be times that the principal would want to give the agent one power or the other, but not both.

What determines power of attorney over a parent?

The key to determine whether or not the power may be given will come down to capacity of the principal. The principal must have capacity to pass the decision-making authority to another whether it be an attorney or a child.

Capacity means that the parent must be of sound mind in order to pass authority to an agent. The principal must understand they are transferring decision-making power to another. If the principal is already incapacitated, then the authority to make decisions may have been dictated in a living will. Although, if this power was not given in a living will, a guardianship will have to be established. This is established by going before the court and being assigned the guardianship. Then you will be able to make decisions for the incapacitated principal regarding financial and healthcare decisions.

Essentially, if a child sees a parent starting to deteriorate, then seeking the advice of an attorney to transfer authority may be beneficial. A child should discuss with a parent, if authority hasn’t already been transferred, giving decision-making power to someone that will make decisions to protect financial and healthcare needs.

Overall, capacity will determine whether the decision-making authority can be moved from principal to agent. If children in the family are aware of their parents mental capacity, then they can determine an opportune moment to address transferring this power.