Everyone needs a backup plan to protect them from the possibility that they may lose the ability to manage their own affairs. Life, after all, is full of curve balls. You might suffer an incapacitating injury. Your mental health might take a dive. You could be afflicted with a degenerative disease, like Alzheimerâ€™s or multiple sclerosis (MS). And should any of these things happen (knock on wood!) you want to know youâ€™re prepared.
In the world of estate planning, there are two general ways to manage this: either via a power of attorney document or a guardianship designation. The former is by far the more common (and more desirable) option, but itâ€™s important to understand both.
Power of Attorney vs. Guardianship
Power of attorney is something you, yourself, grant. When you sign a power of attorney document, you designate a trusted loved one to manage your financial (and sometimes your medical) affairs in your stead. Itâ€™s a piece of paperwork every adult needs to complete so that their life does not fall into disarray should they lose the ability to complete critical, basic tasks.
Power of attorney can be general or limited, meaning you can either give your designated person full or only partial control over your financial (and medical) affairs. The pros and cons of these two options are best discussed with an experienced estate planning attorney.
A guardianship appointment, in contrast, is issued by a court. Sometimes people (and this could be you) lose the ability to care for themselves. When this happens, the legal system steps in to vest a third party with the power (and responsibility) to make decisions on their behalf.
A guardian can be authorized to make legal, financial, and healthcare-related decisions in place of the concerned individual. While this may be necessary in certain, extreme cases, it is also humiliating. Losing your agency is a tough blow, which is why state laws treat guardianship appointments as a last resort.
Less restrictive options (like power of attorney) must first be shown to be ineffective before a court will consider a guardianship appointment. This is a good thing because, as evidenced by theÂ case of Britney Spears, guardianships can cause irreparable damage to families.
Should you be concerned about having a Plan B in place in case anything ever happens to you, a power of attorney document is the place to start. If estate planning attorneys had it their way, everyone would sign one upon reaching the age of majorityâ€”and, frankly, this is sound advice.
To learn more about setting up a power of attorneyâ€”either for yourself or an adult childâ€”do not hesitate to reach out to the experienced attorneys at theÂ Hailey-Petty Law FirmÂ either by calling (512) 910-8977 in Austin, (210) 570-2458 in San Antonio, or by using theÂ contact formÂ on our website.
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