When someone can no longer make decisions for themselves, two primary legal mechanisms exist to ensure their affairs are managed: a power of attorney and a guardianship (also called conservatorship in some states). While both serve the purpose of allowing another person to act on someone's behalf, they differ dramatically in how they are created, what they cost, and how much control the individual retains. Understanding these differences is essential for anyone involved in planning for incapacity.
What Is a Power of Attorney?
A power of attorney is a voluntary legal document created by a competent person (the principal) who designates someone else (the agent) to make decisions on their behalf. The principal chooses their own agent, determines what powers to grant, and can revoke the document at any time while they remain competent.
A POA is proactive. It is created before incapacity occurs, while the principal still has the mental ability to understand the document and make informed decisions. It is a private arrangement between the principal and their agent, with no court involvement.
What Is a Guardianship?
A guardianship is a court-ordered arrangement in which a judge appoints someone (the guardian) to make decisions for a person who has been found legally incapacitated (the ward). The court process involves a formal petition, an investigation or evaluation of the alleged incapacitated person, and a hearing where the judge determines whether guardianship is necessary.
Guardianship is reactive. It typically comes into play only after someone has already lost the ability to make their own decisions and there is no power of attorney in place. The court oversees the guardianship, and the guardian must usually report to the court on a regular basis.
Key Differences Compared
How They Are Created
A power of attorney is created voluntarily by the principal. They choose their agent, define the scope of authority, and execute the document according to their state's requirements. No court is involved.
A guardianship is created through a court proceeding. Someone (usually a family member) files a petition asking the court to declare a person incapacitated and appoint a guardian. The court conducts a hearing, often appoints an attorney to represent the alleged incapacitated person, and makes a determination based on medical evidence and other testimony.
Cost
A power of attorney is relatively inexpensive to create. The costs typically include the document generation fee, notarization fees, and possibly filing fees if the document needs to be recorded. The total cost is generally modest.
Guardianship proceedings are significantly more expensive. Costs include the filing fee for the petition, attorney fees for the petitioner, attorney fees for the court-appointed attorney representing the alleged incapacitated person, costs for medical evaluations and expert testimony, ongoing court reporting and accounting costs, and potential costs for a professional guardian if one is appointed. These expenses can easily reach several thousand dollars for the initial proceeding, with ongoing annual costs for court supervision.
Who Decides
With a power of attorney, the principal chooses their own agent. They decide who they want to handle their affairs, and they can select someone who knows them well, shares their values, and understands their preferences.
With a guardianship, the court decides who will serve as guardian. While the court often appoints a family member, it is not required to do so. If family members disagree or if the court has concerns about the proposed guardian, it may appoint a professional guardian instead. The incapacitated person has no say in the matter if they lack the capacity to express a preference.
Level of Court Oversight
A power of attorney operates with minimal court oversight. Unless someone files a complaint about the agent's conduct, the agent acts independently within the scope of the POA. This provides flexibility and efficiency but relies heavily on the agent's integrity.
A guardianship involves ongoing court oversight. The guardian typically must file periodic reports (often annually) detailing the ward's condition, finances, and care. Some transactions may require prior court approval. While this oversight provides protection against abuse, it also creates additional bureaucratic requirements and costs.
Impact on the Individual
A power of attorney does not remove any of the principal's rights. The principal retains the ability to make their own decisions, manage their own affairs, and override their agent. The agent's authority runs parallel to the principal's authority.
A guardianship, depending on its scope, can remove fundamental rights from the ward. A full guardianship may strip the person of the right to make their own financial decisions, choose where to live, consent to medical treatment, get married, and vote (in some states). Limited guardianships restrict the ward's rights only in specific areas, but even limited guardianships represent a significant loss of autonomy.
Privacy
A power of attorney is a private document between the principal and agent. It does not become part of the public record unless it is recorded for real estate purposes.
Guardianship proceedings are public court matters. The petition, medical evaluations, hearing transcripts, and ongoing guardian reports may all become part of the public record. This means that private financial and medical details may be accessible to anyone who reviews the court file.
When Is a Guardianship Necessary?
Guardianship becomes necessary primarily in two situations.
No POA exists. If a person becomes incapacitated without having created a power of attorney, there is no one with legal authority to manage their affairs. Guardianship is the only option available to give someone that authority.
The existing POA is insufficient or contested. If a POA exists but is inadequate, or if there are allegations that the agent is abusing their authority, a court may need to step in through guardianship proceedings.
In some cases, guardianship is sought even when a POA exists because family members disagree about the agent's actions, there are concerns about exploitation or neglect, or the POA does not cover all necessary areas of decision-making.
Why a POA Is Almost Always Preferable
For nearly everyone, creating a power of attorney is the better option compared to relying on the guardianship system. A POA allows you to choose your own decision-maker. It costs a fraction of what guardianship proceedings cost. It avoids the delays and uncertainty of the court process. It preserves your privacy. It maintains your autonomy and dignity. It can be created quickly and easily while you are still competent.
The main limitation of a POA is that it requires foresight. You must create it while you still have the mental capacity to do so. Once you lose that capacity, a POA is no longer an option, and guardianship may become the only path forward.
Limited Guardianship as an Alternative
Some states offer limited guardianship, which restricts the guardian's authority to specific areas where the person needs help, while preserving their rights in other areas. This is a less restrictive alternative to full guardianship and is often preferred by courts when it is appropriate.
However, even a limited guardianship is more costly, more time-consuming, and more invasive than a power of attorney. It should be viewed as a last resort when a POA is not available.
Plan Ahead with a Power of Attorney
The strongest argument for creating a power of attorney is that it prevents the need for guardianship. By taking the time now to create a POA while you are competent, you ensure that your chosen agent can step in seamlessly if you ever need help, without court involvement, without public proceedings, and without losing your right to make your own decisions.
mypoa.ai can help you create a power of attorney that fits your needs and meets your state's requirements. Taking this step now can save your family significant time, money, and stress down the road. After generating your documents, follow the execution instructions included with your download to ensure proper signing, witnessing, and notarization.