Changes to the Illinois Power of Attorney Act (755 ILCS 45/1-1 et seq.) (“the Act”) will take effect July 1, 2011 (P.A. 96-1195).
What is a Power of Attorney?
A power of attorney is a legal relationship by which the principal appoints an agent to deal with property or make personal and health care decisions for the principal. The agent should be someone in whom the principal places great trust and confidence, as the agent may be given very broad powers to act for the principal.
I typically recommend as a part of each estate plan that a person have an Illinois Statutory Short Form Power of Attorney for Property (POAP) and an Illinois Statutory Short Form Power of Attorney for Health Care (POAHC) in place. This is a very inexpensive way of guarding against the possibility that a principal may become disabled during the course of his or her lifetime. In the absence of a POAP, an estate guardianship proceeding may be required to appoint someone with authority to invest, or sell, or use the principal’s assets for the benefit of the principal. The proceeding may be time-consuming, expensive, embarrassing to the principal or painful for the family, inconvenient, cumbersome, and a lengthy and continuing process to obtain court approval of acts that could have been performed by an agent chosen by the principal if a POAP had been executed by the principal and properly witnessed before the disability arose. The Illinois Statutory Short Form POAP is a durable power of attorney which remains in effect during the disability as specified by the principal. Successor agents, each to act in the order named, may be designated in the form to replace an agent who becomes unable or unwilling to serve.
An Illinois Statutory Short Form POAHC addresses personal and health care decisions, and typically addresses issues at the end of the principal’s life, such as the possible cessation of life-sustaining treatment and disposition of the body upon death.
While the statutory short forms are amended by the recent legislation, forms properly signed and witnessed prior to the effective date will remain in effect after July 1.
What Changes are Coming to the Power of Attorney Act on July 1?
The amendments to the Act provide a form of notice to the principal for a POAP and for a POAHC as to the purpose and effect of each form. The agent receives a notice for each form which reinforces the duties of the agent and acts which should be avoided. The person designated as the agent must now formally accept appointment and certify that the principal is alive, had capacity to execute the power of attorney, has not revoked or altered the power of attorney, and that the power of attorney remains in full force and effect.
The new statutory short form POAP by its terms revokes all prior powers of attorney for property, and the new statutory short form POAHC by its terms revokes all prior powers of attorney for health care. There was a concern that this automatic revocation in the POAP may have been a trap for the unwary, as a person could by signing a new POAP unwittingly and unintentionally revoke a very limited power of attorney, e.g., a bank power of attorney with respect to a particular bank account, or a vehicle power of attorney, or a power of attorney with respect to Farm Service Agency (FSA) benefits. House Bill 1712 would include a statement in the statutory short form POAP that the revocation does not apply to “excluded” powers of attorney like those just cited. H.B. 1712 has passed both houses of the Illinois General Assembly and on June 15, 2011, was sent to the governor.
If you have any questions about how these changes to the law affect you, please give me a call at my office here in Delavan.