Power Of Attorney, Guardianships, And Your Estate Plan

Power Of Attorney, Guardianships, And Your Estate Plan

Probate Lawyer

As a probate lawyer can explain, there are two types of power of attorney: power of attorney for property and power of attorney for healthcare. A power of attorney for healthcare will allow you to appoint a person that will make healthcare decisions for you if you become mentally incapacitated. A property power of attorney enables you to appoint a person to make decisions regarding your property and finances for you if you become unable to do so yourself.

While creating a power of attorney provides many benefits, people may wonder what will happen if they become mentally incapacitated before they have a power of attorney in place. When this happens, guardianship will need to be established. Guardianship of the person and guardianship of the estate mimic the actions of power of attorney for property and power of attorney for healthcare.

Can I Execute a Power of Attorney Once I Am Mentally Incompetent?

Many people mistakenly believe that they can execute a power of attorney at any time. However, the law says the person creating and signing the document must have the mental capability to do so. This means if a person has dementia or a severe mental handicap of some kind, they would not be legally allowed to file a power of attorney. If they do sign one, the document would not be legally valid.

Guardianships vs. Power of Attorney

While a power of attorney is indeed needed in some situations, it is not always the best option. In some cases, guardianship may be more appropriate.

  • Pros of a Guardianship – Guardianship provides a higher level of protection for a disabled person because the process is overseen by a judge, and any interested parties will receive notices regarding how the guardianship is being handled. A legal guardian will also carry more authority with hospitals and other institutions because they are validated by the legal system.
  • Cons of a Guardianship – Guardianships are often much more expensive to create and maintain, and they require more strict procedures and oversight by the court system.
  • Pros of Power of Attorney – These agreements can be very useful if they are created before a person becomes incompetent. They do not have the same expenses that guardianships do, and they are not typically overseen by outside parties. If the agent named under the power of attorney is effective, the document can be very valuable. However, if the agent abuses their power, it can become a nightmare for the disabled person and their loved ones.
  • Cons of Power of Attorney – These agreements provide little protection for the person that has been disabled, because they can be changed, executed, and abused in secret. For example, family members may attempt to obtain power of attorney for a rich relative in order to manipulate them and control their finances. In addition, because power of attorney agreements are not overseen by a court, financial accounts that have been mishandled are often difficult to trace and recover.

Contact an Estate Planning Law Firm Today

If you would like more information about putting together your estate plan, including the different types of trusts that may be beneficial to you, make sure you speak with a lawyer who is skilled and knowledgeable in estate law. Call an experienced attorney, like a Knoxville, TN probate lawyer from a law firm like Carpenter & Lewis PLLC.