Without a comprehensive power of attorney (POA), a lot of men and women cannot handle the financial affairs of their nearest and dearest, nor make health care decisions without court intervention (conservatorship and guardianship). Unfortunately, divorce attorney continues to be our experience that many people, including financial advisors, accountants as well as some lawyers do not understand what one is and why it’s essential to get one. Clients often come into our workplace assuming that, just cause they are married or are a joint owner of resources, they can sell or transfer assets. In fact, a present client can’t sell his mother’s house cause she signed a durable power of attorney.
There are durable powers of attorney which authorize your agent to make decisions for you regarding monetary matters and health care powers of attorney which allow your agent to make decisions regarding your health needs.
Yours can be broad in scope, providing your agent the ability to make all financial choices for you (a General Durable POA) or you can restrict your brokers authority by defining the kinds of financial decisions you may permit them to create (a Limited Durable POA). You can also prefer to give your agent the immediate capacity to make decisions on your own behalf (a Durable POA) or you can restrict your brokers authority to act only once you become incompetent (a Springing POA).
Guardianship is a legal relationship where the court gives a person (the guardian) ability to make private decisions (medical, housing, etc.) for another (the defender). A proceeding is initiated by filing a petition in the probate court. A written statement by a doctor may be necessary to establish the ward’s incapacity. The court then determines whether a guardian is required due to the ward lacking the necessary mental capacity to make private decisions. Unless restricted by the court, the guardian has the very same rights as parents have over their small children. The guardian must report annually to the court concerning the condition of the ward.
A conservator is a legal relationship where the probate court provides a person (the conservator) the power to make financial decisions for a second. The court proceeding are similar to the ones of a guardianship except the court is deciding whether the individual has the capacity to manage their financial affairs. A conservator is also required to submit an annual accounting documenting (with confirmation) all their earnings and expenses incurred each year. A surety bond (an insurance policy) is frequently required by the court to safeguard against the conservator engaging in any improper use of the person’s assets.