When a person becomes incapacitated, his or her financial obligations and living expenses must still be taken care of. Since the person cannot speak for him or herself, the authority to act on their behalf must be given to someone. The two most common methods of doing so are through a conservatorship and through a power of attorney.
Conservatorship is a court proceeding in which the court appoints a person to see to the financial affairs of a person who is incapacitated. A power of attorney, on the other hand, is a document signed by a person who is still of sound mind and body. Jefferson County senior care professionals often find people confuse the two terms, but there are a few other key differences between the two that should be understood.
Conservatorship is a court proceeding, normally done in the probate court of the county where the person resides. An attorney is usually retained to prepare the documents and file them with the court. A conservator will be appointed by the court authorizing the conservator to handle the financial affairs of the ward.
Power of attorney does not involve a court proceeding. It is a document normally prepared by an attorney or through the use of a state approved form. The person designating the power of attorney must have the capacity to understand what the document is when it is signed otherwise it is invalid. It is normally signed in front of a notary public or two witnesses.
Authority Given to the Conservator or Attorney in Fact
In both cases, a great amount of authority is given to the person in charge of the finances. With conservatorship, a probate court may require court approval to act on major financial decisions. With power of attorney, however, the person acting as power of attorney was given a designated amount of authority determined by the incapacitated person when the document was originally signed.
With conservatorship, a probate court will require a periodic accounting of the income and expenses of the ward. A power of attorney does not unless specified in the original signed document. However, many states are now requiring an attorney in fact to act reasonably when making investments. In either case, using the funds of the ward for the caretaker’s personal benefit is considered a criminal act.
Conservatorship is a far more expensive proceeding, often costing thousands in attorney fees. A power of attorney can be prepared for far less, even if an attorney prepares the documents. If the document is prepared through downloaded forms, the cost is negligible.
While it can be challenging to talk with a senior loved one about planning in the event he or she can no longer care for himself or herself, it is essential to do so to avoid stress and frustration in the future. When broaching this subject, it’s also important to ask your loved one if he or she prefers to age in place. With the help of a Jefferson County caregiver, your loved one will have the help he or she needs to remain safe and comfortable at home regardless of personal ability. To learn more, call Home Care Assistance at (303) 987-5992 and speak with a dedicated Care Manager.