One of the questions, or rather worries, that most troubles older people is who will take care of them, and how, and who will handle their personal affairs if, heaven forbid, they lose the ability to care for themselves for any reason, including dementia and other health problems. Many find themselves weighing an enduring power of attorney or a guardian.
Needless to say, this is a natural, human, and legitimate concern. Each of us prefers to be in charge of our own life, to choose how to manage it and how to make decisions about it by our own free will and judgment. At the same time, we all know that as we grow older we may, heaven forbid, reach a point where we can no longer do this ourselves and will have to rely on someone else to do it for us, hoping that person will indeed look after us and our needs faithfully.
Today there are two main legal solutions for such a situation:
Appointing a guardian, or an enduring power of attorney
These two routes, “enduring power of attorney or guardian,” share a basic common denominator: appointing someone authorized to handle the personal affairs of a person who can no longer handle them alone because of a decline in cognitive ability, including judgment, decision-making, and general clarity of mind.
Both are regulated by the same statute, the Legal Capacity and Guardianship Law, 1962:
The appointment of a guardian is governed by Chapter Three of the Legal Capacity Law (from Section 33 of the law onward).
The making of an enduring power of attorney is governed by Chapter Two-1 of the Legal Capacity Law (from Section 32A of the law onward).
Guardianship appointments are a very old mechanism, while the enduring power of attorney is a relatively new one, born at the end of 2016, and it is still not widely known among the general public.
That is far from the only difference between them, though. There are quite a few others, and anyone weighing whether to make an enduring power of attorney (for themselves, their parents, or anyone else) should know them.
In this article we will first explain the main difference between the two routes, and then go through the other significant differences.
What is the main difference between an enduring power of attorney and the appointment of a guardian?
A guardian is appointed for a person when that person is no longer able to manage his own affairs and make decisions about them. The appointment is made by the Family Court, on the application of the person’s spouse, a relative, the Attorney General, or their representative.
By contrast, an enduring power of attorney is made while the person is still fully capable of managing his own affairs and making decisions about them, and in it he appoints the person who will handle his affairs if, in the future, he loses that ability. Procedurally, the power of attorney must be signed before an authorized attorney and deposited with the Administrator General.
In other words, the person is effectively appointing a kind of “future guardian” to manage his affairs should he no longer be able to manage them himself. He can even give his attorney-in-fact detailed advance instructions on how his affairs should be handled, according to his personal preferences and wishes, or he can leave the attorney-in-fact full discretion in handling them.
This, then, is the main difference between the two routes: the element of control.
In the guardianship process the person has no control over anything, including who will be appointed, over which matters, and how. The enduring power of attorney gives the person a great deal of control over all of these questions, which is its decisive advantage: the ability to decide in advance who will handle your affairs when you cannot handle them yourself, and even to instruct that person exactly how you would like it done.
In this way, an enduring power of attorney preserves the dignity, wishes, and changing needs of the person granting it, without completely stripping away his legal standing and regard for his wishes once he loses capacity, and it gives him peace of mind until then.
Deciding in advance who the attorney-in-fact will be, which matters they will handle, and how, also prevents family fights over who should be appointed to manage the grantor’s affairs, and removes any doubt about how he himself would want to be cared for.
The range of control a person gains by making an enduring power of attorney is quite broad:
The identity of the attorney-in-fact
First and foremost, the grantor chooses who will serve as the attorney-in-fact handling his affairs.
Typically, the grantor appoints a relative he trusts completely, such as a spouse or child.
He can give the attorney-in-fact full freedom of action and full powers, or limit and supervise him by imposing a duty to report to relatives or other named people, a duty to consult, or a duty to obtain their prior approval for certain actions.
He can also appoint several attorneys-in-fact rather than just one, and decide whether they act jointly or separately, what each one’s authority covers, who decides if they disagree, and who supervises them.
He may also name an alternate attorney-in-fact, in case the original one is unable or unwilling to serve when the enduring power of attorney takes effect.
The matters covered
The grantor may authorize his attorney-in-fact to handle personal matters (such as where he will live: at home or in assisted living), and/or medical matters (such as which treatments he wishes to receive), and/or property matters (such as how his bank account will be managed), all of them or only some.
He can also leave advance instructions on how he would like each of these matters handled.
How the enduring power of attorney takes effect
As a rule, the enduring power of attorney takes effect when the grantor ceases to be able to understand and make decisions in the matters it covers, based on an expert opinion accompanied by a declaration that the attorney-in-fact must submit to the Administrator General.
The grantor may also set the way it will be determined in the future that he no longer understands a matter, for example by expert opinion, provided the power of attorney does not take effect solely at the attorney-in-fact’s say-so, and he may set different tests for different matters.
In addition, the grantor can designate “informed persons,” people the attorney-in-fact must notify when the power of attorney takes effect and, afterward, of his decisions and actions under it. The grantor can also decide whether he wants his relatives to be entitled to receive information about him under the Legal Capacity Law, or whether to restrict the information provided to them on specific matters he lists.
What are the other differences between an enduring power of attorney and the appointment of a guardian?
- A fast and flexible procedure: Unlike a guardianship appointment, an enduring power of attorney is made entirely outside the courtroom, so the process is much faster and more flexible. There is no need to go to court, file an application for an appointment order, pay a fee, and wait for a judge’s decision. All you need to do is see an attorney who has been trained and certified to draw up enduring powers of attorney, and unlike the judge, you choose that attorney yourself.
- No ongoing reporting to the Administrator General: Unlike guardianship, an enduring power of attorney carries none of the ongoing (and burdensome) reporting duties owed to the Administrator General. In guardianship, those duties include filing an asset inventory (detailing the ward’s property) and a living budget (detailing the ward’s monthly income and expenses) shortly after the appointment, and filing annual reports every year (detailing all actions, income, and expenses involving the ward’s property).
Can a guardian be appointed for someone who has made an enduring power of attorney?
A guardian cannot be appointed for a person who has signed an enduring power of attorney and deposited it with the Administrator General, under a ruling of the Lod District Court in case No. 21463-01-19 A.A. v. Y.A.
When an application to appoint a guardian is filed, the court must forward it to the Administrator General for review, so the Administrator General can check and inform the court whether that person has deposited an enduring power of attorney covering the matters for which the guardian was requested. If it turns out that the person has indeed deposited an enduring power of attorney, the guardianship application will be rejected, and instead an application must be filed to bring the enduring power of attorney into effect.
Recommended reading – How to choose a family lawyer
