POWER OF ATTORNEY AND GUARDIANSHIP

Under the new Power of Attorney Law, not only must the agent account to the principal, but, as set forth in NY G.O.L. 5-1501A, if a guardian is later appointed, the agent shall account to the guardian rather than to the principal. This I find interesting because most attorneys will recommend making a Power of Attorney in order to make guardianship proceedings unnecessary arguing that a Power of Attorney is much less expensive and much less stressful than the court-appointed guardian process. Article 81 of New York’s Mental Hygiene Law authorizes a court to appoint a guardian to manage the personal and/or financial affairs of a person who cannot manage for himself or herself because of incapacity and not all Article 81 guardians in New York have the same powers. Guardianship orders are specifically tailored so that the powers that are granted to the guardian are those that are specifically necessary to meet the needs of the person who is incapacitated. For example, a person may not be able to pay their bills or manage their money, but may have the ability to make healthcare decisions. In such a case, a court might appoint a guardian with powers that are limited to financial management. So this raises a question: what is best for the principal? To execute a broad Power of Attorney while they have the capacity or have a guardian appointed when necessary?