Learning the Difference Between a Power of Attorney and a Guardianship, Part II

By Fredrick P. Niemann, Esq. of Hanlon Niemann, a NJ Guardianship Attorney

For individuals who lack mental capacity, a guardianship is the only solution that will ‘permit another person, called the “guardian,” to make decisions for them. Unlike a power of attorney, a guardianship is an involuntary action. The potential guardian files an action in court to have another person, called the “ward,” declared mentally incapacitated.

A guardian makes financial decisions for his ward; however, a guardian also makes healthcare and residential decisions for the ward. Unlike a power of attorney, the ward cannot revoke the guardianship.

A guardian must prepare and file an accounting with the Surrogate’s Office and the interested parties (family members typically) on a regular basis. In most instances, a power of attorney agent does not have to account to the principal, unless the principal specifically requests an accounting.

A guardian frequently has to go back to court to asks the court’s permission to engage in certain financial transactions, for instance, selling the ward’s home. A power of attorney agent using a well-drafted power of attorney does not have to ask anyone’s permission to engage in financial transactions.

Finally, a guardianship costs far more than a power of attorney. A well-drafted power of attorney might cost a person $200 – $495. A guardianship will cost the ward’s estate anywhere from $4,000 to $7,000, depending upon the attorney the potential guardian hires to represent him. For this reason, and many others, I always recommend that a client sign a well written power of attorney.

If you have questions concerning a power of attorney or guardianship, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com/.

 

Posted in Guardianship.