Overview
When planning for incapacity, it's important to understand the differences between a
Power Of Attorney
(POA) and a Committeeship. Both allow a trustee to make decisions on behalf of another person, but there are significant distinctions.
Power of Attorney
A POA authorizes someone to manage the property of the
donor
according to the terms set out in the POA document. The donor can revoke the POA if they are mentally competent, or it can be overridden by a committeeship order.
To grant a POA, an adult must understand the nature and consequences of the power being given. This includes:
- The property they own and its approximate value.
- Obligations to dependents.
- The attorney’s ability to manage financial affairs, excluding making a will.
- The risk of property value declining if not managed prudently.
- The possibility of the attorney misusing their authority.
- The right to revoke the POA if they regain mental capacity.
An attorney under a POA has
fiduciary
duties and must act in the best interest of the donor. If the attorney misuses their power, a breach of trust claim can be filed to recover assets.
Committeeship
A committeeship is appointed by a court when a person is deemed incompetent due to:
- Mental infirmity
from disease, age, or other causes.
- Disorder or disability of mind from drug use.
An applicant, usually a close family member, must apply to the court for a committeeship order. The application requires:
- Two affidavits from medical practitioners confirming the patient’s incapacity.
- Affidavits detailing the next of kin and the patient's assets and affairs.
The application must be served on the
Public Guardian and Trustee
and the patient (unless waived by the court). The relationship between the proposed committee and the patient should be clearly explained to ensure the committee is trusted and appropriate.
A committee, subject to court order terms, has the same rights, privileges, and powers regarding the patient's estate as the patient would if competent. Committees are also entitled to reasonable compensation for their duties.
Legal Advice
Whether acting as a POA or a committee, one must always act in the best interests of the individual they represent. Due to differences in duties and legal obligations, consulting a lawyer is crucial for understanding these responsibilities or for challenging the actions of an attorney or committee.