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Heritage Tree LogoWhat is the Difference Between a Guardianship and a Power of Attorney?

What is the Difference Between a Guardianship and a Power of Attorney?

There may come a time when you have to make important decisions on behalf of a loved one. Read on to learn more about your various options.

What is a Guardianship?

Guardianship is awarded when someone no longer has the mental capacity to make sound decisions for themselves. In this event, an individual may have the legal right to make these decisions on behalf of their loved one. In order to convince the court to name you as guardian, you will typically have to present some medical or practical evidence that shows a significant decline in this individual’s ability to remain independent, therefore proving that they need a guardian. Once the court awards guardianship, you will have the authority to make legal, financial, and medical decisions in the lives of this individual.

What is a Power of Attorney?

A power of attorney is a legal document where an individual designates another person to act on their behalf and make financial, medical or other decisions in the event that they become incapacitated. Different types of powers of attorney include:

  • General power of attorney: A general power of attorney is when the principal gives an agent the right to make certain financial transactions on their behalf, should they ever become incapacitated or unable to make these financial decisions on their own. These decisions can include banking matters, certain investments, and more.
  • Limited power of attorney: This type of power of attorney designates an agent for a specific situation, such as the principal being unavailable or unable to conduct certain business matters on their own. For example, if you are purchasing a house and will not be available to sign the necessary documents.
  • Springing power of attorney: A springing power of attorney will only take effect at a predetermined moment in time. Once the triggering event occurs, the agent can act on behalf of the principal.
  • Durable power of attorney: This power of attorney gives an agent the right to handle various financial affairs, such as sign checks and open bank accounts on behalf of the principal. That being said, once the principal becomes incapacitated, the durable power of attorney will be terminated.

The biggest difference between a guardianship and a power of attorney is that you must be awarded guardianship by a Pennsylvania court and an individual awards you as power of attorney in their estate plan.

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