The Importance of Guardianships versus Powers of Attorney

Georgia Estate planning Attorney Mark Biernath and Cobb County probate Judge Kelli Wolk address deciding between a power of attorney and a guardianship and give scenarios of an individual having a power of attorney versus a guardianship.  

Mr. Biernath: Power of attorney does not remove any rights. So if you have your child sign a power of attorney and then they go out and sign up for a cell phone contract, its logically inconsistent for you to say “Well they didn’t know what they were doing when they got the cell phone contract”. So you can’t disavow or void contracts with that power of attorney. In fact, as Judge Wok mentioned, that power of attorney is a contract. And if you were the one that instigated it and you were the one that said “Hey, here sign this”, you’re the one that’s saying this individual has legal capacity. It’s going to be real hard for you to turn around and say they don’t have legal capacity.

Judge Wolk: Take this car back!

Mr. Biernath: Powers of attorney can be revoked and this is a big issue in the mental health arena. With mental health issues, you might have sufficient capacity to enter into a power of attorney, and say “Yeah my parents can talk to my doctors and help make decisions” but during a therapy session that individual might tell the doctor “I don’t want you talking to my parents anymore”. That is a verbal revocation of powers of attorney. That doctor is now in the position, what do they do? If I share information when my patient directly told me not to, I can say he doesn’t have capacity or I can he has capacity.  The doctor doesn’t want to be in that position. Guess what the doctor is going to lean towards, not sharing the information. Under HIPPA there are no rewards for following HIPPA. There are only punishments, $25,000 fines per incident. This past spring the first 2 fines were actually handed out, $4.5 million against an insurance company and a $2.5 civil judgment against a doctor. HIPPA is going to be more and more of an issue when those cases lose their appeal and go on.  So, powers of attorney have some uses but they are limited. They might not be honored and here is what Judge Wolk was talking about. That power of attorney can be evidence of capacity. And I actually had a situation where mom and dad decided they weren’t going to do this guardianship; they were just going to do a power of attorney. Well their daughter was in school and all of her friends were talking about going to college and she wasn’t going to college. Now this young lady had a very good memory and she went online and she had memorized mom’s credit card number. The daughter had enrolled herself in an online college. Didn’t tell anybody until mom sees an $8000 charge on her credit card. Mom called the school and said you know she doesn’t know what she’s doing, she won’t be able to do the work and the schools said fine no problem if you can send us a police report about the credit card fraud, we’ll reverse the charges. Well now mom and dad had to decide, do we expose our child to potential a potential charge of credit card fraud. Do I think that any body would have really pursued that? No, but it was a risk. They decided to withdraw the student from school, they paid $2000 and then we went and did the guardianship. Had the guardianship been in place before hand, that contract was null and void and we could’ve gone that route. I think the biggest issue right now facing young adults and entering into contracts is online. Dating websites is a big concern. My most complicated guardianship case that took place last year started because of a relationship that started on an online dating website. When ever you enroll into those online dating websites you have to click and agree to certain things. Those are all contracts. And if you have a guardianship you can nullify those contracts and get rid of the profile. But in this case, we couldn’t do that.