The Difference Between Guardianship & Power of Attorney

Remember the old Fram® oil filter TV commercial from the 1980s? The tag line was, “You can pay me now… or you can pay me later.”

The idea behind this old TV spot is that taking precautions, being proactive and preparing for the future will save time, money and energy down the road. Coincidentally, this is also a prudent philosophy when it comes to incapacity estate planning.

• Pay Me Now means preparing for your own mental and/or physical incapacity.
• Pay Me Later means being unprepared by delaying and procrastinating, leaving important financial and health care issues unresolved.

Pay Me Now

Taking time now to meet with an estate planning attorney and spend a few dollars to have appropriate legal documents prepared will help avoid problems later. For starters, everyone age 18 or older needs a durable power of attorney and an advance health care directive. Have you prepared yours?

These fundamental legal documents allow you to appoint someone you know and trust to make your financial and health care decisions when needed. If you don’t have these documents when a crisis strikes, then by default you are creating a mess for your loved ones to clean up. Note: Even spouses do not automatically have the right to make critical financial and medical decisions for one another!

Pay Me Later

If you are unable to meaningfully participate in decision-making due to an injury or illness, then you will need someone to step in and make decisions for you. With the durable power of attorney, you would have already made that selection, and that person would be ready to make sure your assets are managed and your bills and taxes are paid. With the advance health care directive (also known as a “health care proxy”), your appointed agent would have full access to your physicians, medical records and the authority to make your medical treatment decisions. However, without these legal documents, your loved ones would not have the power to help you without court authority.

A guardianship, also called a conservatorship, is the default Pay Me Lateroption. To be named as your legal guardian, someone (e.g., your spouse or adult child) would need to initiate a court process seeking to have the court declare you legally incompetent. What does that entail?

Ultimately, the process employs three attorneys (i.e., the attorney hired by your loved one, the judge and the attorney appointed by the judge to represent you) and reveals your private health, financial and family circumstances to the public record. If the judge finds you incompetent, then he or she will sign an order appointing a guardian over you. All of the duties and responsibilities of caring for you are then transferred to the guardian. That includes managing your finances, living arrangements, treatment and other medical decisions.

This Pay Me Later default approach takes time and money. A lot of it, too. Sounds a bit stressful? It is.

Which option would you choose?

It’s a no-brainer. Take personal responsibility for your future and Pay Me Now.Get these plans in order and provide peace of mind for yourself and your loved ones.