According to the CDC, 1 in 4 Americans is living with a disability. Some people have a disability or medical condition that makes them incapable of taking care of their own finances and assets.
That’s when a conservatorship or power of attorney comes in.
But what’s the difference between conservatorship vs power of attorney? Keep reading to find out all you need to know!
What Is Power of Attorney?
The power of attorney is a legal form that will let someone make certain decisions for someone else.
However, the individual still will retain their right to make their decisions. The power of attorney is limited in that it can only make health care or financial decisions on behalf of someone.
If you get a more general power of attorney, this isn’t limited to certain areas. Instead, it can limit authority for a certain period of time under special circumstances.
For example, you could use a power of attorney in the event that an individual is not able to. You’ll need to have them declared incapacitated by a medical professional.
Once that happens, the power of attorney form can be used outside of a courtroom setting. A judge does not have to approve it.
This is normally one of the cheaper ways to grant authority to an individual who does have the capacity. Without the capacity to give authority, then the document won’t be valid and then you can’t transfer any power to someone else.
What Is a Conservatorship?
A conservatorship is an actual agent who the court appoints. They’re in charge of handling an adult’s financial affairs when they’re incapacitated.
In a conservatorship, the person who is incapacitated is a protected person. This is similar to a power of attorney, but this will grant the conservator the power over all of the person’s assets. The conservator can only do certain activities though.
A conservatorship can be appointed for the rest of someone’s life, but it could also be done for just one single transaction. This could be to help someone sell a house.
A conservator also has to be in higher duty to make sure that the person they’re over is a person. A power of attorney is expected to act in the person’s best interest, but they aren’t legally required to.
If a conservator is going to be managing someone’s investments, they’ll need to consider the person’s needs, retirement plans, risk tolerance, and tax implication. They’ll need to make good investments and adjust portfolios accordingly.
In most cases, a family member will be appointed by the court to be a conservator. If there are multiple people applying for it, then the judge will find a public conservator. They will also do that if no one applies.
If the incapacitated adult appointed someone in their will, then that person will be made the conservator as the court will respect their wishes.
To set up a conservatorship, then you can check out this homepage to get help.
Power of Attorney vs Conservatorship
There are actually a lot of differences between these two types of legal actions.
One difference is that the power of attorney is set up before someone becomes incapacitated. A conservatorship is normally set up after someone is incapacitated.
Because a conservatorship is more serious, a court will need to get involved for it. The court doesn’t get involved in the power of attorney.
There could be a unique situation where someone asks for a conservatorship when the power of attorney is already in place. However, the power of attorney doesn’t cover all the needs, so in that case, the court will grant a conservatorship to help out with those needs.
In that case, the court will review it before they appoint a conservator so that each arrangement can exist together.
In the legal hierarchy, a conservatorship will trump the power of attorney. However, in most cases, the power of attorney will get rid of any need for a conservatorship.
One thing that both of these have in common is that it’s best if you talk with a lawyer or legal aid to get help setting these up.
The cost is also a major difference, and many families will consider this factor. Your average person can draw up a power of attorney with almost no cost.
You can find online legal forms that you can download and access for free. If you don’t live in a state that offers it for free, then you’ll have to pay legal fees to have a lawyer make the document for you.
Even if you complete it on your own, you should still make sure that a lawyer looks over it.
On the other hand, a conservatorship is very expensive. The state will charge you fees to file a petition in court. This fee will depend on what state you’re living in.
You’ll also have to pay for an attorney that can represent you in court. The conservatee may also have their own lawyer too.
Discover Difference Between Conservatorship vs Power of Attorney
These are only a few of the main differences between conservatorship vs power of attorney, but there are many other factors that are different.
When in doubt, make sure that you talk to your lawyer or legal counsel to make sure that you can make an informed decision.
If you are interested in more legal topics, explore our website to find even more great articles that are helpful as this one!