They say I have to have a guardianship for my brother who has dementia to put him in a VA foster home setting. Why is POA not enough?

Alice is this a standing or springing POA? Springing requires that he be incompetent prior to being in force. Standing you step in when you feel appropriate. It does not require a court hearing to determine incompetency but letters from his doctor with a suitable second opinion letter should do the trick. In my case the POA document states specifically the right to determine residential placement and it is a standing POA, which is kind of a scary thought. Laws vary by the state you are in. The POA should be sufficient.

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POA's enable you to sign for things, but ONLY a Guardian can place someone in a facility against their will. At a Guardianship hearing the Judge orders a psychiatric evaluation and issues a court order for you to take over entirely. Since you don't want to do that, you ask the county social services to step in and assign a social worker to him, and resign your POA. They can pursue the legal steps to make him a ward of the state. If he runs away, you tell the authorities you want no responsibility, you have resigned as POA and they should take him to the hospital or VA, be firm that you are no longer able to keep him safe. You can even petition the court to appoint a guardian other than yourself and that you wish to resign your POA. Get out from under the POA responsibility, if you take the right steps, it is not abandonment.