When a loved one becomes unable to make decisions or manage their finances, it may become necessary to have someone act on their behalf. That person may take on the role of a power of attorney or a conservator. And while those positions are somewhat similar, it’s important to understand the distinctions and responsibilities of each.
Power of Attorney
A power of attorney is a legal document that allocates the right to make certain decisions on another’s behalf. The document is executed outside of the courtroom and does not require a judge’s approval. A power of attorney is commonly used to pay bills, manage bank accounts, and make decisions regarding medical treatment. The responsibilities can change depending on the health of the individual the document intends to help.
A power of attorney allows someone to act on behalf of another whenever it becomes necessary, and to the extent specified in the document. Oftentimes, a power of attorney can be less costly than a conservatorship, as regular appearances in court are not required.
A conservatorship is a legal relationship created through a formal court proceeding. A judge may remove certain rights from the conservatee and can grant them to the conservator. The purpose of a conservatorship is to protect the conservatee’s health and assets. It’s most often used in cases where the person is mentally, physically, or emotionally unable to care for themselves.
The conservator’s responsibilities can vary depending on the judge’s ruling. The conservator may be granted the power to make financial decisions, healthcare choices or both. It all comes down to protecting the conservatee. The conservator is also required to put together an annual report on the conservatee’s progress and present it in court.
The Key Differences
A conservatorship is a proceeding conducted by a judge while a power of attorney does not need to be executed in a courtroom setting. A power of attorney also does not need to report to the court on a regular basis. Remember, conservators must complete an annual report on the status of the conservatee.
When selecting a power of attorney, the person executing the document can pick the person that will eventually manage their financial affairs or make important healthcare decisions. On the other hand, a conservator can be either picked by the court, or someone can apply and be approved by the court. Under these circumstances, the conservatee may not have control over who’s selected to manage their affairs.
Do you have more questions about the responsibilities of a conservator or a power of attorney?
At Marcia L. Campbell, CPA we act as trusted professional fiduciaries for many of our clients. As licensed professionals, we understand the importance of knowing that your trust, estate, or conservatorship is being managed legally, ethically, and accurately. We act as caring and objective fiduciaries and client advocates.
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