Many clients request information on the differences between Guardianships and Powers of Attorney. These are important topics when decisions must be made for a family member who has been deemed incapacitated, can no longer manage their own finances, or make their own medical decisions.
An ordinary or standard power of attorney document provides the authority for another person (the agent or attorney-in-fact) to make decisions and take actions on the principal’s behalf when the principal is unable to do so for himself or herself. In the event, the principal becomes physically incapacitated, and for example, they break a hip and need extensive rehabilitation, then the principal will not be able to attend to their normal monthly payment of bills or banking transactions. Also, the principal may plan to take an extended trip or vacation and may need to have documents executed while they are away. The ordinary or standard power of attorney document would authorize the principal’s chosen agent or attorney-in-fact to sign documents, receive and pay bills, and make banking transactions on the principal’s behalf. An ordinary or standard power of attorney would become invalid if the principal became mentally incapacitated.
A durable power of attorney is a document that would authorize the principal’s chosen agent or attorney-in-fact to execute documents, receive and pay bills and make banking transactions on the principal’s behalf (as well as many other actions), but would remain effective even if the principal became mentally incapacitated. It is possible to have the power of attorney document drafted to be broad in scope, giving the agent or attorney-in-fact the authority to make any and all property, financial, and personal decisions for the principal; or the power of attorney document could be drafted to authorize the agent or attorney-in-fact to perform very limitedly, specific duties for the principal.
Florida Statute 709.08 outlines the formalities involved with the creation of a durable power of attorney, who may serve as the agent or attorney-in-fact, and provides information as to the durability of the power of attorney in Florida Statute 709.08(3)(b), which states: “The attorney, in fact, may exercise the authority granted under a durable power of attorney until the principal dies, revokes the power, or is adjudicated totally or partially incapacitated by a court of competent jurisdiction unless the court determines that certain authority granted by the durable power of attorney is to remain exercisable by the attorney in fact.”
What happens to either of the powers of attorneys mentioned above when a person is incapacitated and someone petitions to have him or she declared a ward of the State of Florida? Florida Statute 744.462 provides a guideline for the Court to consider when a person already has a valid Durable Power of Attorney executed. The law provides that if the Durable Power of Attorney is the least restrictive means that can be used to meet all the needs of the principal (the Ward), then a guardianship would not be necessary. Florida Statute 744.462 states as follows: “Any judicial determination concerning the validity of the ward’s durable power of attorney, trust or trust amendment shall be promptly reported in the guardianship proceeding by the guardian of the property. If the instrument has been judicially determined to be valid or if, after the appointment of a guardian, a petition is filed alleging that there is an alternative to guardianship that will sufficiently address the problems of the ward, the court shall review the continued need for a guardian and the extent of the need for delegation of the ward’s rights.”
If the Ward has a Durable Power of Attorney that the Court determines to be valid, depending on the scope of the language included in the Durable Power of Attorney, the Court may determine that a Guardian is not needed and that the person appointed as the agent or attorney-in-fact for the Ward can act for the Ward in making decisions without the need for Court intervention and the appointment of a permanent Guardian.
A guardianship is a legally binding relationship where a Probate Court authorizes a Court appointed Guardian to make all personal and/or financial decisions for the incapacitated person as determined by the Court. The Court could determine that the Ward only requires a Guardian to make decisions regarding Ward’s finances and property, or health and medical decisions, or both. The Probate Court determines the extent of Ward’s incapacity at a hearing held to determine what rights the Ward should retain if any, and what needs the Ward is unable to meet for his or her health, safety, and well-being. If the Probate Court determines that there are essential health, safety, medical, financial or legal needs that are not being met by the Ward due to Ward’s incapacity, the Court will appoint a Guardian to make those decisions for the Ward. (See Florida Statute 744.3215 regarding Rights of Persons Determined Incapacitated.) After the Probate Court appoints a Guardian, that Guardian is required by law to report to the Court on an annual basis. Annual filing fees will be required to accompany any and all reports filed by the Guardian to meet the Court’s reporting requirements. In the event the Guardian fails to report to the Court on an annual basis, the Court has the power to discharge that Guardian and appoint another person as Guardian who will comply with the annual reporting requirements.
When comparing the Durable Power of Attorney and the Guardianship, the Durable Power of Attorney can be a relatively low cost and private way to determine who will be granted the authority to legally act for the principal in the event the principal can no longer act or speak for themselves. If there is no Durable Power of Attorney in place, then Court intervention may be necessary if the person is deemed incapacitated, and Court proceedings can become costly. Also, the principal (Ward) may not be able to choose who they wish to be appointed as their Guardian, as that decision is ultimately made by the Probate Court.
Guardianship litigation and probate litigation usually follow each other although, with any amount of luck, a skilled estate and guardianship litigator might structure a global resolution that reaches beyond Ward’s death to the satisfaction of the fighting relatives.