Family members can sometimes have a legal relationship that determines who can make personal decisions and/or have legal authority over another.
A financial Power of Attorney document is an important estate planning tool that allows an individual, commonly referred to as a Principal, to appoint another trustworthy person to control all financial decisions on their behalf, during their lifetime, and in the event they are unable to do so.
The individual empowered to make these decisions is commonly referred to as an Agent under the document and will have only those powers that are specifically defined in the Power of Attorney document. Such powers might include dealing with real property, making banking transactions, filing taxes, making investments and others.
These documents can either be drafted so they would go into effect as of the date of their execution or can be designed to spring into effect upon a doctor’s determination that the person is in a state of incapacitation.
The definitions of a Guardian and Conservator vary from jurisdiction to jurisdiction. However, generally:
(Note: A Custodian is a person who will manage the financial assets of a child until they reach adulthood.)
Where an individual is incapacitated and is in need of a Guardian or Conservator, a loved one will need to petition a Court to make a legal determination that they are incapacitated and in need of the care of a Guardian or Conservator.
A Conservator or Guardian will be appointed by a Court to fill the gaps where a Power of Attorney document does not empower an Agent to act on behalf of the Principal.
Conservators and Guardians must act in the best interests of the Ward, or else they may be removed or penalized for any actions that were against the Ward’s interests, assuming that is able to be proved in Court.
A trust is an estate planning instrument that allows a person to provide for the financial care and support of a loved one for their lifetime - a person known as trust beneficiary. At the end of the life of the first beneficiary, the assets or property can be distributed to another person, known as the successor beneficiary.
For example, a deceased spouse or parent will leave assets and property to be distributed to their children and spouse for their lifetime, and then, upon their death, will be distributed to another individual.
1. A Trustee will only have the ability to make distributions to the beneficiaries under the strict guidelines set out in the trust.
2. The Trustee must act in the best interests of the beneficiary and must make investments and distributions that are both prudent and reasonable under the circumstances.
NOTE: An Elder Law attorney can help you determine which legal document you need, and help you through court proceedings, such as a Guardianship proceeding, to help you obtain legal rights.
If it is a minor then typically Guardianship supersede PoA, however if an adult is the ward, the guardian may have to take steps to terminate the power of attorney,