There are so many legal terms in the estate planning world. The legal jargon can be overwhelming and frustrating. Estate planning is, after all, important. It is the time to put key legal protections in place that safeguard a future you want for yourself and your family. To help you wade through some of the legalese you will face during the process, we are going to go into some important details regarding conservatorships and power of attorneys. While these are two tools to grant assistance to those that may face difficulty managing their affairs, they are very different in a couple of key aspects.
Comparing a Conservatorship and a Power of Attorney
With a power of attorney, the principal, the person establishing the power of attorney, grants authority to the agent to act on the principal’s behalf. This grant of power can be broad or narrow in scope. It can be granting authority for the agent to conduct a specific financial transaction on the principal’s behalf or it can grant broader, general powers for the agent to conduct legal, financial, or health care decisions on the principal’s behalf. You can even make a power of attorney durable which means that the power put in place will survive incapacitation of the principal. The power can go into effect immediately or you can make it a springing power of attorney which would not become effective until the principal is declared incapacitated or otherwise legally incompetent.
A conservatorship, on the other hand, is a court-established legal relationship in which a person referred to as the “conservator” is granted authority by the Probate Court to make financial decisions on behalf of the “conservatee.” While a conservatorship is similar to a guardianship arrangement, it is more limited in scope as the conservatorship is only in relation to the management of the conservatee’s financial affairs. Commonly, however, a court will appoint the same person to act as both conservator and guardian, if a guardianship is needed in addition to a conservatorship.
So, with both a conservatorship and a power of attorney, another person can be empowered to conduct financial business on behalf of another. Furthermore, the use of a conservatorship or a power of attorney can avoid putting the much more restrictive guardianship arrangement in place. A power of attorney, however, can be an effective way to also avoid having a conservatorship put in place. This can be a much more attractive option as a power of attorney allows the principal to choose the agent whereas a court appoints the conservator on the conservatee’s behalf.
Furthermore, with the court intervention required of a conservatorship, a conservatorship is markedly more expensive. It is also more time-consuming. Being managed by the court can also be frustrating and feel overly invasive. If you want to try and avoid a conservatorship or guardianship in the future, putting a power of attorney in place can be a great way to accomplish this.
Pittsburgh Estate Planning Attorneys
Put important legal protections in place now and enjoy the peace of mind that can come with doing so. The team at Jones, Gregg, Creehan & Gerace is here to help. Contact us today.