POWERS OF ATTORNEY: Frequently Asked Questions.
What is a Power of Attorney?
A "Power of Attorney" is a legal document empowering an agent to make decisions for a principal. These decisions can address issues pertaining to real estate, financials, tangible assets, and health care. There are two kinds of of Powers of Attorney with regard to estate planning: 1) a power of attorney for property; and 2) a healthcare power of attorney.
You may have encountered powers of attorney in other contexts, such as buying and selling real estate; however, those powers of attorney are limited, meaning that they apply only in the narrow context for which they were created (for example, signing the contract for sale). The powers of attorney discussed here, on the other hand, are general, meaning that they can apply to a broad range of circumstances and decisions. Moreover, they are durable, meaning that they remain valid even after the principal becomes incapacitated.
You may have encountered powers of attorney in other contexts, such as buying and selling real estate; however, those powers of attorney are limited, meaning that they apply only in the narrow context for which they were created (for example, signing the contract for sale). The powers of attorney discussed here, on the other hand, are general, meaning that they can apply to a broad range of circumstances and decisions. Moreover, they are durable, meaning that they remain valid even after the principal becomes incapacitated.
Why is a Power of Attorney Important?
Individuals who have a validly executed power of attorney can rest assured that someone they have selected and who they trust can step into their shoes and make decisions on their behalf if they suffer from an incapacity. If, for example, you begin to experience signs of dementia and are thus unable to properly care for yourself or your assets, your agent designated within your power of attorney can step in and make decisions for you.
If, on the other hand, you fail to create a power of attorney and then suffer from an incapacity, your loved ones would be obligated to initiate a guardianship proceeding in court and have a judge appoint someone for you.
If, on the other hand, you fail to create a power of attorney and then suffer from an incapacity, your loved ones would be obligated to initiate a guardianship proceeding in court and have a judge appoint someone for you.
What is the Law Governing Powers of Attorney?
The Illinois Power of Attorney act, effective July 1, 2011, and found at 755 ILCS 45, governs the law in Illinois on Powers of Attorney. Article II of the act is called "Durable Powers of Attorney" and addresses the ability for the agency to continue after the incapacity of the principal. Articles III and IV of the act address powers of attorney for property and health care, respectively.
What Duties Does the Agent Designated in a Power of Attorney Owe?
The agent is under no duty to exercise the powers granted under the power of attorney. However, upon the exercise of a power, that agent must act in good faith for the benefit of the principal, using due care, competence and diligence. He or she must keep records of receipts, disbursements, and significant actions, and provide copies of these upon request to state agencies or the principal.
What are the Legal Requirements for Creating a Valid Power of Attorney in Illinois?
State law creates statutory forms of the powers of attorney, which is highly recommended for individuals to use in Illinois. Although the statutory form has its limitations, following the form allows for third parties to more easily recognize and accept the document, thus reducing the possibility of delay in acting pursuant to the agency created by the power of attorney. The healthcare power of attorney must be signed by the principal and at least one witness. The power of attorney for property must also be signed by the principal and a witness, and must furthermore be notarized.
Can I Designate More Than One Agent?
A principal is able to designate a co-agent, but cannot do so using the statutory form. Alternatively, a principal can designate a successor agent who can act on behalf of the principal in the event that the primary agent is unable or unwilling to act.
How Long Does My Agent's Power Last?
The agency can terminate at a date specified within the power of attorney itself. However, unless otherwise specified, the agency terminates at the death of the principal. Post-death planning and care is typically managed through the executor of the estate, as designated by the will, and/or the trustee of a trust, as designated by the trust.
Powers of attorney are revocable, meaning that the power can be taken away by the principal after having given it.
Powers of attorney are revocable, meaning that the power can be taken away by the principal after having given it.
