Wondering what the difference is between a conservatorship and a power of attorney? Read on for everything you need to know about how they differ.
Sometimes individuals need assistance managing their affairs, whether it’s because they are growing older or because they have an event or condition which impacts their mental capacity.
Two arrangements that grant broad authority for people to step in and make legally binding decisions on behalf of another person are conservatorships and powers of attorney.
But while both these arrangements grant legal authority for someone to act on another’s behalf, there are crucial distinctions between the two, including whether or not they are voluntary, how they are created, and how they can be revoked.
If you’re wondering about the difference between power of attorney and conservatorship, we’ll explain how a power of attorney and a conservatorship both work, plus the crucial ways that they differ.
A power of attorney is a legal document in which a person (the “principal”) authorizes someone else (the “agent” or “attorney-in-fact”) to act on their behalf.
Powers of attorney (or POAs for short) can grant either broad or limited powers and can thus be used for a variety of purposes. For instance, a principal could authorize an attorney-in-fact to make legally binding decisions on their behalf for most matters, or they could carve out a limited grant for something as specific as executing a single transaction.
A principal can revoke a power of attorney or make changes, including naming a different agent, as long as they are of sound mind. Also, note that a principal can still act and make decisions on their own behalf, so long as they are of sound mind. Executing a power of attorney document does not by itself prevent a person from making their own decisions. It simply empowers the attorney-in-fact to do so as well.
There are numerous types of power of attorney, but there are two key distinctions: between general and limited (or specific) POAs and between durable and non-durable POAs.
The difference between a general and a specific power of attorney has to do with the scope of authority that the principal grants.
A general power of attorney is a broad grant of power that authorizes the agent to act on the principal’s behalf in most matters spanning both their personal and financial affairs.
A specific power of attorney, as you might guess, is a narrow grant of power that authorizes the agent to act on the principal’s behalf in particular circumstances. For example, a financial power of attorney allows an attorney-in-fact to do things like manage bank accounts, execute financial transactions, and make other financial decisions.
Meanwhile, a medical power of attorney (sometimes called a health care power of attorney) gives the attorney-in-fact the ability to make medical decisions for the principal.
As mentioned, a limited POA can even be as narrow as authorizing the attorney-in-fact to file the principal’s taxes or to execute a single financial transaction on their behalf.
The other main distinction between different powers of attorney relates to when they expire.
A power of attorney always expires when the principal passes away, so the critical distinction is whether a power of attorney remains in effect when the principal becomes incapacitated.
A durable power of attorney remains in effect when the principal becomes incapacitated, whereas a non-durable POA would expire. Additionally, a springing POA is a form of durable POA that takes effect–or springs–when a particular condition or event occurs, such as the principal's incapacitation.
For this reason, a durable POA often makes sense for medical POAs because it is typically precisely when a principal cannot make decisions for themselves that the attorney-in-fact would be called upon to make medical decisions. Likewise, durable POAs are also valuable estate planning tools that help plan for the future care of an aging parent or loved one.
Here's an example of when a non-durable power of attorney, durable power of attorney, and springing power of attorney remain in effect if an injury or mental illness that leads to incapacitation occurs.
A conservatorship is also a legal arrangement for someone else to make decisions on behalf of an incapacitated person or someone who needs help managing their affairs, who is typically called the “ward.” (Remember that both the relevant laws and the terminology may vary by state – for instance, a ward is called a “protected person” in Arizona).
But unlike a power of attorney, a conservatorship is an involuntary arrangement in which the court essentially takes away legal rights from the ward and gives them to the conservator.
A conservatorship is typically created by court order when the ward can no longer make their own decisions. This usually requires a showing of “incompetence,” but the specific legal meaning and threshold for this standard varies with states’ laws.
The conservator has a fiduciary obligation to act in the ward’s best interest and, like a POA, has the authority to make legally binding decisions on the ward’s behalf.
As with a power of attorney, a conservatorship can be either general or specific.
In some circumstances, a judge might create a limited conservatorship, such as in a financial conservatorship. But keep in mind that someone found to be legally incompetent, or even simply unable to manage their affairs in one aspect of their life, often requires help managing other aspects of their life as well.
A judge could thus grant a general conservatorship in which the conservator has the legal authority to make virtually all decisions on the ward’s behalf, though such arrangements are rare.
Since conservatorship is not voluntary, the ward does not get to pick their conservator. That said, the judge will usually appoint any family member who petitions for the role and is qualified to serve as the conservator.
The judge may also appoint a professional conservator, sometimes called a professional fiduciary, if multiple family members seek the position or if no family member is available.
So, what is the difference between a conservatorship and power of attorney? First, let’s summarize some of the similarities.
But they differ in significant ways. Most notably, differences between conservatorship and power of attorney include:
People also sometimes wonder about the difference between a durable POA and a conservatorship. Ultimately, though, all the considerations discussed above still apply.
In some ways, a durable power of attorney and conservatorship are more similar than a non-durable power of attorney because durable POAs remain in effect when the principal loses the ability to make their own decisions.
So, what is the difference between conservatorship and power of attorney?
While both legal arrangements might be used to help someone manage their affairs if they lack the mental competence to do so themselves, conservatorships differ from powers of attorney because they are not voluntary; they are created by the court; and they can only be revoked by the court.
Given these differences, it often makes sense to create a durable power of attorney to actively plan for the future and make your preferences known rather than leaving such important decisions to a court to make for you.
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