Is a guardian financially responsible for his ward?  Is a power of attorney agent financially responsible for his principal?  Assume that your mom is unable to handle her affairs.  You may have to become your mom’s legal guardian, or if your mom has signed a financial power of attorney, you may have to act as her power of attorney agent.  But does serving in these roles make you financially responsible for your mom’s debts?

A guardianship is a court action through which one person (called the guardian) seeks to have another person (called the ward) adjudicated as being unable to handle her affairs, typically because of a mental disability.  If a guardianship is granted, the court will declare that the ward no longer has the ability to handle her affairs and that the guardian must handle her affairs now.

A power of attorney document is a self-executed document.  The person signing the document (called the principal) must have the ability to understand the nature of the document she is signed.  If the principal retains sufficient mental capacity to sign the power of attorney document, then she can name another person (called the agent or attorney-in-fact) who will have the authority granted in the power of attorney.  A well-drafted power of attorney will permit the agent to handle a wide array of financial matters for the principal.

Making decisions for someone else is a difficult for a number of reasons.  Am I doing what my mom would want?  Am I handling her affairs appropriately?  Am I financially responsible for my mother because I am her guardian or power of attorney agent?

There is a statute that says that a guardian is not responsible to provide for the ward from his own funds.  There is another statute that says the guardian is not liable to third parties for acts of the ward solely by reason of his relationship as the ward’s guardian.  Similarly, an agent under a power of attorney would not be financially responsible for the principal.  In fact, unlike a guardianship through which the court formally appoints the guardian of the ward, a power of attorney document is completely voluntary at all times.  The principal never has to serve if he chooses not to serve and can cease serving as the agent at any time he chooses to stop serving.

If the guardian has to place his ward in a nursing home, the guardian will not have to pay the nursing home from his own funds. The same for an agent under a power of attorney.  If the ward needs food or clothing, the guardian is not responsible to purchase these items for the ward using the guardian’s personal funds.  The same for an agent under a power of attorney.

But what if the ward or principal, suffering from dementia, hops into her car, drives down the road, and runs someone over?  Is the guardian responsible for the actions of the ward?  The statute says that the guardian is not liable to third parties (the person run over) simply because of the guardianship relationship to the ward as her guardian.  What about an agent under a power of attorney?  Is he liable in such a situation?

For the guardian, it comes down to foreseeability.  For instance, was it foreseeable that mom would get into her car and drive down the road?  Did she express a desire to drive?  Did the ward leave her unattended for long periods of time?  Where the car keys easily accessible to mom?  These are the sort of questions that a lawyer for the victim would ask.  If it was foreseeable that mom might drive down the road and if it were known that mom lacked the ability to drive, then the guardian might be held liable for allowing mom access to the car.  A guardian of a person is typically in charge of both the ward’s finances and personal affairs, such as driving a car.

An agent under a power of attorney only has access to the principal’s financial affairs, specially, those financial affairs detailed in the power of attorney document.  The power of attorney document does not impose a responsibility on the agent to handle the principal’s financial affairs.  And an agent is never responsible for the personal affairs of the principal.

Furthermore, most power of attorney documents are effective whether or not the principal is unable to handle her own affairs, so her mental incapacity is irrelevant.  No court has to say that the principal is unable to handle her affairs in order of the agent to act.  So the agent would not be responsible for the ward’s act in driving the car.

Most adult children assume a parent’s care expenses stop with the parent. In some situations, however, the law can create obligations that catch families completely off guard. Understanding those risks early is far easier than dealing with them after bills begin to accumulate.