When an individual becomes incapacitated and can no longer make responsible decisions, the court may need to step in and appoint a guardian. This is different than a financial power of attorney which is chosen by the individual; the court chooses for the individual who will manage the individual's affairs. This substitute decision maker, also called a conservator in some states, can be authorized to make legal, financial, and healthcare decisions. Guardianship can be a relative, public guardian, private or non-profit agency.
An attorney is usually retained to file a petition for a hearing in the probate court in the proposed ward's county of residence.
Courts often give guardians broad authority to manage the ward's affairs. In addition to lacking the power to decide how money is spent or managed, where to live and what medical care he or she should receive, wards also may not have the right to vote, marry or divorce, or carry a driver's license. Guardians are expected to act in the best interests of the ward, but given the guardian's often broad authority, there is the potential for abuse.
How to Avoid Guardianship
Power of Attorney
A power of attorney (POA) is the grant of legal rights and powers by an individual to another. The POA, acts for the individual on financial, business or other matters. In most cases, even when the power of attorney is immediately effective, the individual does not intend for it to be used unless and until he or she becomes incapacitated.
A revocable or "living" trust can be set up to hold an older person's assets, with a relative, friend or financial institution serving as trustee. The individual can be a co-trustee of the trust with another who will take over the duties of trustee should the individual become incapacitated.