Introduction
What tools do we have to provide care for those we love?
When someone you love one can no longer make decisions on their own, families often wonder: What’s the right legal tool — guardianship or power of attorney? These terms are often used incorrectly or interchangeably, but they are very different legal tools. Knowing the difference can help you choose the option that best protects your loved one while respecting their independence.
What Is a Power of Attorney (POA)?
A Power of Attorney is a legal document that allows one person (the principal) to grant another person (the agent or attorney-in-fact) the authority to make decisions on their behalf.
- When it’s created: While the principal is still mentally competent and able to consent.
- Flexibility: The principal chooses which powers to give — financial, medical, or both. In Indiana, you can create detailed instructions on each designated power. (i.e., the ability to pay bills, but not change financial accounts, etc.)
- Control: The principal can revoke the POA at any time, as long as they remain competent.
- Court involvement: None is required. This is a private arrangement, though healthcare providers or financial institutions may require a copy of the document.
Example: Sarah signs a power of attorney naming her daughter to handle banking and bills while Sarah travels overseas. Later, when Sarah is diagnosed with dementia, the POA continues to allow her daughter to manage finances without going through court.
What Is Guardianship?
Guardianship is a legal status created by a court when someone (the ward) is found to be legally incapable of managing personal or financial affairs.
- When it’s created: Only after a court determines the person cannot manage their own needs due to incapacity, disability, or age.
- Scope: The court defines the guardian’s powers — personal (healthcare, housing) and/or financial (income, assets).
- Oversight: Guardians must file reports with the court, and sometimes seek approval for major decisions.
- Control: The ward loses some legal rights (such as signing contracts).
Example: After a stroke leaves James unable to make safe decisions about his medical care, the court appoints his brother as guardian. The court requires annual reports on James’s health and finances.
Key Differences Between POA and Guardianship
| Feature | Power of Attorney | Guardianship |
|---|---|---|
| Created By | Individual (principal) | Court order |
| Timing | While person is competent | After incapacity |
| Flexibility | Tailored to principal’s wishes | Court decides scope |
| Oversight | No ongoing oversight | Court supervision required |
| Revocation | Principal can revoke (if competent) | Only court can terminate |
Which One Should You Choose?
- Plan Ahead with POA: If a loved one is still competent, signing a power of attorney is almost always the simpler, less expensive option. This is also very common for people that are incarcerated or that are serving in the military.
- Guardianship as a Safety Net: If a person is already incapacitated and never signed a POA, guardianship may be the only option.
- Sometimes Both: Even if a POA exists, a guardianship may still be necessary if there are disputes, abuse, or gaps in authority.
Practical Takeaway
- A Power of Attorney is proactive — created while someone still has capacity.
- Guardianship is reactive — ordered by a court after capacity is lost.
- Both tools aim to protect vulnerable individuals, but guardianship involves more court oversight and less personal control.
What’s Next?
If you’re unsure whether a power of attorney or guardianship is right for your situation, the attorneys at Harshman Ponist Smith & Rayl, LLC can help. We provide clear guidance on planning ahead with powers of attorney and navigating the guardianship process when it’s needed.
Contact us today to protect your loved one’s best interests.