Guardianship vs. Power of Attorney in North Carolina: What’s the Difference?

When a loved one needs help managing their finances, health care, or other important decisions, families may hear terms like guardianship and power of attorney. Although both can allow another person to assist with important decisions, they are very different legal tools. Understanding the difference can help you determine which option may be appropriate for you or your family.

What Is Guardianship?

A guardianship is a legal relationship created through a court proceeding. In North Carolina, an adult may be adjudicated incompetent when the court determines that the person lacks sufficient capacity to manage their own affairs or make or communicate important decisions.

A guardianship proceeding generally begins when someone files a petition asking the court to determine whether an adult is incompetent. The filing of a petition alone does not mean that the adult will lose the ability to make decisions. The court must follow a legal process, and incompetence must be established by clear, cogent, and convincing evidence.

If the adult is adjudicated incompetent, the court may appoint a guardian and determine the scope of that guardian's authority.

Depending on the circumstances, a guardian may be authorized to make decisions involving matters such as:

• Where the individual lives;

• Medical care and treatment;

• Financial accounts and property; or

• Other personal or financial matters.

  
  

Importantly, guardianship does not necessarily mean that another person takes over every aspect of an individual's life. North Carolina law recognizes that an adult should continue to participate in decisions and exercise the rights that the individual is capable of exercising.

The court may also establish a limited guardianship, allowing the individual to retain certain rights while giving the guardian authority only over specific areas in which assistance is necessary.

North Carolina law further recognizes that guardianship should be a last resort for adults. Less restrictive alternatives should be considered before guardianship is imposed.

What Is a Power of Attorney?

Unlike guardianship, a power of attorney generally does not require someone to first be declared incompetent by a court.

A power of attorney is a legal document through which a person, called the principal, voluntarily gives another person, called an agent, authority to act on the principal's behalf.

The scope of that authority depends on the document. For example, a financial power of attorney may authorize an agent to handle matters involving bank accounts, real estate, taxes, business interests, or other financial affairs. The document may provide broad authority or limit the agent's authority to particular transactions or responsibilities.

A health care power of attorney serves a different purpose. It allows a person to designate someone to make health care decisions on their behalf if they become unable to make or communicate those decisions themselves.

Because the principal chooses the agent and determines what authority to grant, powers of attorney can be an important part of planning ahead for incapacity.

The Key Difference: Choice vs. Court Intervention

One of the most important distinctions between guardianship and a power of attorney is how the decision-making authority is created.

With a power of attorney, an individual generally makes the decision in advance to authorize someone they trust to act for them.

With guardianship, a court becomes involved after concerns arise about an individual's ability to manage certain aspects of their life. The court determines whether the individual is legally incompetent and, if appropriate, appoints a guardian and determines the guardian's authority.

This distinction is one reason planning ahead can be so important. Properly prepared powers of attorney may provide trusted individuals with authority to assist when needed and, depending on the circumstances, may reduce the need for a future guardianship proceeding.

However, every situation is different. A power of attorney may not eliminate the need for guardianship in every case, particularly when no valid planning documents exist, an appointed agent cannot or will not act, or other circumstances require court involvement.

Need Help With Guardianship or Powers of Attorney in North Carolina?

Whether you are planning ahead for yourself or trying to determine how to help a loved one who can no longer manage certain decisions independently, understanding your options is an important first step.

The attorneys at Aligned Advocates can help you evaluate whether a power of attorney, guardianship, or another legal option may be appropriate for your circumstances.

Contact Aligned Advocates to schedule a consultation and discuss your options.

Thank you to Kali Ward, for her contributions to this post.