Power of Attorney Vs. Conservatorship

By Elizabeth Rayne

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.

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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.

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What Is Needed for the Power of Attorney When a Spouse is Incapacitated?
 

References

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What Is a Revocable Power of Attorney Form?

A revocable power of attorney, or POA, is a legal document that appoints an agent, or attorney-in-fact, to handle transactions on your behalf. The agent can be any trustworthy person or institution you choose. Most states require POA documents to be in writing and specify certain requirements for creating and revoking POAs. Be sure your power of attorney form and any revocation you issue conforms with your state law requirements.

Legal Guardianship in Colorado

A guardian is appointed by the court to make personal decisions on behalf of another person, known as the ward, when that person is incapable of making decisions for himself. A ward may be a minor child or an incapacitated adult. In Colorado, the laws governing guardianship are found in Title 15, Article 14 of the Colorado Revised Statutes.

What Happens if a Beneficiary Becomes Mentally Incompetent?

The mental incompetency of a beneficiary can create complications for the trustee of a trust or anyone else who stands in a fiduciary relationship to that beneficiary. A duty to manage assets for another's benefit can conflict with a duty to pay money or distribute assets to an individual who may be incompetent to handle her own affairs. Fortunately, this conflict is not impossible to resolve.

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