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My sister and I could be co-guardians (if possible for 2 to be guardian) of our elderly (89 yrs old) father with dementia and other medical issues, there would be no dispute between us as far as one or both of us being guardians and we would have medical documentation on his physical and mental state. Neither one of us has the "funds" to spend for an attorney we feel based on his condition etc. we could do this ourselves if there are papers we could submit to the courts ourselves.

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POA's are usually recommended as a tool to avoid the need for a guardianship. But my understanding is that if he has dementia and no longer has capacity, its too late for a POA. Its something you do BEFORE its an issue. If every one is getting along and there is a POA, then I would imagine there shouldn't be any problems. If there is no POA, then you may have no alternative than to get a guardianship. Perhaps you can get a free consultation with a lawyer to see what you need to do in your situation. If Dad isn't that far gone, and doesn't have a POA, maybe its not too late.
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Jeanne & Jinx have brought up a key issue…if you already have POA, why do you need a guardianship?

What would guardianship do that would be different from what a POA does?

Is it the situation in which Dad is fighting everything that you do or suggest?
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Do you actually need guardianship? If you have POA, you wouldn't usually need guardianship, would you?
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Do either of you have durable power of attorney now?
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It would depend on what state you live in. In CA, you aren't required to have one. Although it is not inexpensive at all. There may be charitable organizations that provide low cost preparation of forms and you may be able to get a fee waiver from the Court for some or most of the fees. Honestly, every state is different, and they all have different rules, costs and requirements. But no matter where you live, you can be sure it will be confusing, difficult, and frustrating. You MAY be able to do it without an attorney, but its probably wiser to have one. An attorney will know what is required AFTER you are appointed, forms, deadlines, etc. Remember that guardianships/conservatorship bring with it a certain higher level of liability and responsibility with it. Its not something that I would try on my own.
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As it's for your father's benefit that the guardianship needs to be set up, I would have thought it reasonable for your father's money to cover the legal expenses. You could check with whoever is responsible for managing his finances at the moment, plus I'd check with whichever lawyer I wanted to commission to do the work, that this correct before you proceed.
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Seriously, you need a lawyer and there are court costs. The judge will order an independent evaluation and appoint a temporary guardian until it can be determined if you are appointable. You will both get a thorough background and credit check and be fingerprinted.
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