Power of Attorney Vs. Conservatorship

by Elizabeth Rayne
    Individuals may consider a power of attorney to help with finances.

    Individuals may consider a power of attorney to help with finances.

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    Timing is everything in understanding the differences between a power of attorney and a conservatorship. While both provide an individual with the authority to make decisions regarding the financial matters of another person, a POA is executed in advance of incapacity, while a conservatorship happens upon petition to the court after an individual is no longer able to competently make important financial decisions.

    Power of Attorney and Conservatorship Overview

    Both a power of attorney and a conservatorship give a person the authority to make decisions about financial matters for another person. When an individual has the capacity to do so, he may draft a legal document, called a power of attorney, to give the authority to another individual to act on his behalf. The authority may be limited to certain activities, such as filing taxes. The court is not involved in the creation of a POA. On the other hand, the court may grant a conservatorship to a responsible individual to take care of the finances of someone who does not have the capacity to manage his own affairs.

    Incapacitation

    Unlike a conservatorship, a power of attorney is created before a person becomes incapacitated. A POA must be created by a person who is competent at the time the document is created. However, a durable POA may continue to be in effect after the individual becomes incapacitated. A person is considered incapacitated if, for reasons other than being a minor, she is unable to make decisions for herself and cannot adequately take care of her health care, nutritional needs and the like. Incapacitation may be as a result of mental illness or injury that resulted in brain damage.

    Conservator Appointment

    In order to initiate a conservatorship, you must file a petition with the court. The court will schedule a hearing to hear evidence as to whether the individual is incapacitated and incapable of making financial decisions for herself. If she is found to be incapacitated, the court may grant either a general or limited conservatorship, depending on the level of need. If the individual is mostly able to take care of himself, but needs assistance with finances, the court my grant a limited conservatorship where someone will help the individual only in areas deemed necessary.

    Power of Attorney Considerations

    If someone files a petition for a conservatorship where a power of attorney is already in place, the court may consider the existence of the POA before appointing a conservator. The court is likely to honor the POA, but it may also grant a conservatorship to help the individual with needs that the POA does not cover. Further, a conservator may challenge a POA on the grounds that the agent is not properly managing the individual's assets.

    About the Author

    Elizabeth Rayne earned her J.D. from Penn State University and has been practicing law since 2009, advising clients on issues ranging from employment law to nonprofit management. For two years, she served as a contributing editor for the "Vermont Environmental Monitor."

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