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Legislative Updates

Illinois

Power of Attorney

PA 96-1195, House Bill 6477. Effective Date: July 1, 2011. Amends 755 ILCS 45/2-1, 2-3, 2-5, 2-7, 2-8, 2-10, 2-11, 3-3, 3-4, 4-4, 4-10, and 4-12. Adds: 755 ILCS 45/2-10.3, 2-10.5, 2-10.6, 3-3.6, 3-5, and 4-5.1.

This Bill alters the Illinois Power of Attorney Act. First, the Act defines incapacity. Incapacity means either the definition at Section 11a-2 of the Probate Act of 1975, or a three element definition provided in the Act. This definition requires: (1) a declaration from a licensed physician that a principal lacks decision making ability; (2) a signed, written record from the physician created within 90 days of making the determination; and (3) that the written record was delivered to the agent acting with power of attorney for the principal.

The Act also provides that a power of attorney may be revoked by a principal at any time so long as the principal has the capacity to do so. Furthermore, a new power of attorney only revokes a previous one if it states that it revokes the previous one or that it revokes all other powers of attorney.

The Act amends 755 ILCS 45/2-7, providing for a standard of care and record keeping by the agent. Instead of using "due care" to Act for the principal, an agent now must Act "in good faith for the benefit of the principal using due care, competence and diligence." The agent must Act according to the principal's expectations to the extent they are known by the agent.

The provisions for record keeping are also expanded. An agent must maintain records of "receipts, disbursements, and significant actions" taken in the agency relationship. Copies of these need only be provided according to the power of attorney and when requested by one of the following parties: (1) the principal or his/her fiduciary, or after the principal's death, his/her successors in interest; (2) agency representative acting in accordance with the Elder Abuse and Neglect Act; (3) the Office of the State Long Term Care Ombudsman when investigating a complaint of elder care exploitation; (4) the Inspector General of the Department of Human Services; or (5) a court acting under Section 2-10 of the instant Act.

When one of the above parties properly requests such receipts, if the agent fails to provide them within 21 days, the state may petition a court to order their disclosure. Furthermore, if the agent failed to provide these materials without good cause, the court may order the agent to pay costs, attorney fees and other appropriate relief. If the failure to follow these provisions causes a loss to the principal's property, the agent may also be liable to restore the property's lost value.

The Act adds the concept of an "Agent's Certification and Acceptance of Authority" to establish the agency relationship. This document may be given by the agent to a relying party instead of an affidavit. The document must be prepared in similar form to the template provided at 755 ILCS 45/2-8(b).

The Act also amends the process for an interested party to challenge an agent's power of attorney. An "interested" party includes: (1) the agent or principal; (2) a guardian or other fiduciary of the principal; (3) the principal's spouse, descendant, or parent; (4) "a person who would be a presumptive heir-at-law of the principal"; (5) a person who will be a beneficiary by receiving property upon the principal's death; (6) a government agency concerned with elder care; and (7) the principal's caregiver or someone else sufficiently interested in the principal's welfare.

If such a petition is filed, under 755 ILCS 45/2-10(a), "a court may construe a power of attorney, review the agent's conduct, and grant appropriate relief including compensatory damage." If the court finds misconduct by the agent, he or she cannot use funds from the principal's estate to pay attorneys fees for defending against the challenge. If the agent's misconduct caused a loss in value of the principal's property, the court may hold the agent liable to reimburse that lost value. These proceedings may commence in the county where the guardian was appointed or where the agent or principal live, or where the principal owns real property.

In a new section, 755 ILCS 45/2-10.3, the Act provides for successor agents. A principal may designate either a successor agent or another party with the power to name a successor agent in the event an agent cannot or will not serve. Third parties relying on representations by a successor agent that a predecessor agent is no longer available are generally protected from liability. A successor agent may demonstrate his or her agency status through a "Successor Agent's Certification and Acceptance of Authority" in the form of the template provided in the statute.

Another new section provides for co-agents at 755 ILCS 45/2-10.5. Co-agents may not be named in a "statutory short form power of attorney for property under Article III or a statutory short form power of attorney for health care under Article IV." Other powers of attorney that provide for co-agents are governed by the new provision. Co-agents must generally Act as a majority unless under urgent circumstances. Agents are not liable for each other actions unless an agent knows about but fails to disclose an imminent breach of fiduciary duty to the principal. Co-agents may establish their agency through a "Co-Agent's Certification and Acceptance of Authority" in the form of the provided template.

Powers of attorney executed in another state are governed by new provisions at 755 ILCS 45/2-10.6. To be valid, the document must comply with the laws of the state or country of origin; the state of Illinois; the state or country where the principal lives, has a "place of abode or business," or is a national; or the state or country where the agent lives or works.

The statute amends the provisions for the statutory short form power of attorney for property and statutory short form power of attorney for health care, at 755 ILCS 45/3-3 and 755 ILCS 45/4-10, respectively. A properly created form contains "(1) Notice to the Individual Signing the Illinois Statutory Short Form" for either property or health care; "(2) Illinois Statutory Short Form Power of Attorney" for either property or health care; and "(3) Notice to Agent." These notices are provided as templates within the statute. The statutory short form power does not give the agent the power to appear in court as an attorney-at-law without actually being a licensed attorney authorized to practice law within the state.

A document may also satisfy this requirement if the explanatory language is properly distinguished from the legal paragraphs. The new statute also adds the requirement that at least one person must witness the principal's signature and the principal's signature must be notarized. At 755 ILCS 45/3-3.6, the statute prohibits the following parties from witnessing or acting as a notary for a property power: an attending physician or mental health provider or their family members; an owner or operator, or such person's relative, who owns or operates the principal's care facility; parents, siblings, or descendents of the principal or an agent; or, an agent or successor agent. Substantially the same prohibitions are placed on who can witness a health care agency.

Finally, at 755 ILCS 45/4-4, the statute adds definitions for "incurable or irreversible condition," "permanent unconsciousness," and "terminal condition."

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[Last update: 8-25-10]