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Doris was concerned about her mom Kitty. After her father passed, Kitty lived alone in the home Doris grew up in.  Although her father Lou was the breadwinner and took care of the bills prior to his death from throat cancer, Kitty had no trouble taking on the responsibilities previously done by her husband.  Seven years after Lou's passing, Kitty timely paid the monthly bills, took over Lou's floral shop and kept it a successful business.  However, recently Kitty suffered a stroke.  She was unable to function as she previously did because the stroke left her with some physical limitations. Kitty was still capable of making decisions for herself but the doctors were concerned the stroke impacted her ability to reason and there was an increased risk for future strokes. Doris did not know what to do.  Her mom was still her mom and while Doris noticed Kitty was becoming forgetful, she was still able to understand and capable of making her own decisions.  Kitty was also scared because she did not know if her health would improve, stay the same or become worse.  She certainly did not want anything bad to happen with her finances or the floral shop because she and Lou worked hard to ensure Doris and their grandkids would be financially secure after their deaths.  She considered if something should be done now to give Doris some authority to make decisions on her behalf concerning her health and finances or should she wait. She discussed it with Doris.  Doris arranged a meeting with an attorney.  Kitty and Doris wanted to know if a power of attorney or guardianship would be needed and which would be better for Kitty's situation.


Both a power of attorney and a guardianship grants a person authority to make decisions on the behalf of another.  Each can give one person decision making authority over another's person (ie. medical and healthcare decisions, decisions regarding the day to day care, living arrangements etc.) and over the person's finances (access to accounts, decisions to buy and sell stocks, real and/or personal property etc.).  In both guardianship and a power of attorney, the person receiving authority to act on the behalf of another, once the authority is granted owes a fiduciary responsibility to the other. Once a fiduciary relationship is created, a legal obligation is owed to the principal or ward to place their interests above the agent or guardian's own self interest.  The decision as to whether a power of attorney is or a guardianship is best for Kitty's situation will rest on her capacity.



When creating a power of attorney, the person who grants authority to another to act on their behalf must have capacity to do so.  Capacity is the ability to understand and make decisions.  Even if a person is ill or occasionally does not have capacity, if the power of attorney is made at a time when they are able to understand and make decisions for themselves, then they can give authority to another to make decisions on their behalf.  Given that Kitty is still able to understand and make decisions for herself, she does have capacity to grant Doris authority to make decisions on her behalf with a power of attorney. The authority granted in a power of attorney is done outside of a court.

A guardianship is created when one is needed.  A judge will decide if an incapacitated person should have another appointed to make decisions over a person and or their estate. Significant authority will be given to another and the decision to grant the authority will not be made by the ward.  A judge will declare a person legally incompetent first before a guardianship over their person and/or finances will be created.  Given that Kitty is still capable of making her own decisions, her capacity is not at the point where a guardianship is necessary.


The person who grants authority to another to act on their behalf with a power of attorney is referred to as the principal and the person who receives authority the agent. So in the example above, if Kitty grants Doris authority to act on her behalf through a power of attorney, Kitty would be the principal and Doris would be her agent. Whereas in a guardianship, a declared legally incompetent person will become a ward and the person with authority to make decisions on behalf of the ward will become the guardian.  In order for Kitty to become a ward and Doris her guardian, Kitty would first have to be declared legally incompetent by a judge.


A power of attorney can be limited in scope to grant authority for a specific transaction or more extensive to grant authority for a variety of decision making powers. Principals like Kitty get to decide how much authority they wish to grant.   The terms of the power of attorney can begin immediately or spring into existence once the incapacity occurs. The power of attorney can also end in a specified time frame  or continue without a specified deadline depending on the principal's preference. Agents like Doris will not be supervised in their exercise of the granted authority.  As a result, individuals who seek to create a power of attorney should know and trust the person whom they will grant decision making authority.  

The judge in a guardianship proceeding will decide based on the person's capacity, the scope of the guardianship.  The judge will decide how long the guardianship will last, what decision making authority to grant the guardian and what rights the ward will retain. The courts will keep on an eye on how the guardianship is proceeding and will require the guardian to submit an annual report on the person and/or estate depending on the type of guardianship created.1 Because a court will be more involved, the costs associated with a guardianship are typically greater than with a power of attorney.


Deciding whether a guardianship or a power of attorney is right for an individual will really rest on the capacity of the person decision making authority is taken from.  As discussed above, a guardianship will only be created by a court where the need exists.  Thus like Kitty, if the proposed ward, still has the ability to understand and make decisions on their behalf, a guardianship is not necessary.  A power of attorney would be the proper instrument to grant decision making authority.  If however, the proposed ward does not have the requisite understanding to make decisions then a guardianship is needed.  Furthermore, the guardianship will be created to correspond with the person's incapacity.  For instance, if a person is capable of making and understanding decisions for the healthcare, and their well-being but is incapable of understanding and making financial decisions, then a estate guardianship alone will be created and the ward would retain their rights to make decisions over their person. However, if the proposed ward lacks the ability to understand and make decisions over all aspects of their lives, then the court is likely to create a general guardianship over the estate and person to correspond with the need the incapacity creates.

Author's Information: Tracey A. Beecher is a probate and estate attorney. She drafts wills, represent will disputes, heirship proceedings and non-probate estate matters.  She represents clients within Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller counties.

Legal Disclaimer: Each person's situation and circumstances are unique. As such, this article is given to provide general information only. It is not legal advice nor is it intended as a substitute for legal counsel. Should the reader need legal advice or counsel, it is appropriate to seek the assistance of a licensed attorney.

1Texas Estates Code 1163.101 and Texas Estates Code 1163.002