Disclaimer: This article does not constitute legal advice. Please seek legal counsel for any decisions related to your individual situation. Student legal services may be able to assist you or answer questions specific to your individual situation:
What is a power of attorney?
A power of attorney (hereafter called POA), according to Black’s Law Dictionary (11th ed. 2019), is a legal document granting an individual (known as agent or attorney-in-fact) authority to act on behalf of another person (known as the principal or grantor). The legal document is made between two main persons: (1) the principal or grantor – the person creating the document, and (2) the agent – the person going to act on behalf of the creator of the document. A POA allows a person to select someone to act for them when they are unable to handle their own affairs. If a person does not create a POA, a court may decide who to act for that person in case they are unable to handle their own affairs. A person may also create a POA for a variety of reasons for another person to handle certain matters on their behalf.
What are some types of POAs?
POAs can be classified according to their nature, purpose, or objectives. Below are some types of POAs. NB: the list below is non-exhaustive but highlights some principal types of POAs.
Table 1. Sourced from Black's Law Dictionary (11th ed. 2019) and Legal Zoom (2024, February 9).
| No. | Type of Power of Attorney | Nature, Purpose, or Objective |
|---|
| 1 | General Power of Attorney | This allows an agent to act for a principal in any legal situation but terminates when the principal is unable to handle their affairs or upon death of the principal. |
| 2 | Durable Power of Attorney | This POA remains in effect during a period of the principal’s incapacity i.e., unable to make decisions for themselves. |
| 3 | Irrevocable Power of Attorney | This cannot be revoked by the principal once created e.g., due to a third person having an interest in the POA created. |
| 4 | Power of Attorney for Health Care | This POA enables an agent to make medical decisions on behalf of the principal. |
| 5 | Special Power of Attorney or Limited POA | This grants an agent limited power over specific transactions or for a specific period. It comes to an end once the period or task is completed. |
| 6 | Springing Power of Attorney | This POA specifically comes into effect during a period of a principal’s incapacity allowing an agent to act for the principal. |
What legislation applies to POAs in Illinois?
The main law that regulates the creation of a POA in Illinois is the Illinois Power of Attorney Act (hereafter called the ILPOAA). The ILPOAA determines the validity of a POA in the State of Illinois. The law can be found in the 2022 Illinois Compiled Statutes 755 ILCS 45 – Illinois Power of Attorney Act.
The ILPOAA applies to all agencies created in Illinois and to all other agencies if the principal is a resident of Illinois at the time the document creating the agency is signed or at the time of exercise of the POA. It also applies if the document creating the agency indicates that Illinois law should be the law that applies to the POA.
What are the types of POA under Illinois law?
In the State of Illinois, all POAs made in accordance with the ILPOAA are Durable Power of Attorneys unless otherwise provided in the document creating the POA. Thus, if a person becomes incapacitated after creating the POA, the POA remains in effect and the agent can continue to act for the person.
The ILPOAA provides two templates for creating a POA. These templates are called “Statutory Short Forms” (hereafter called SSF). These are Statutory Short Form Power of Attorney for Property, and Statutory Short Form Power of Attorney for Health Care.
The general policy rationale behind the SSFs is to provide standard documents for the creation of POAs to protect the public. Through these documents, people in Illinois can easily go online, print the document, and fill them in to create a POA.
However, the standard document provided in the ILPOAA are not meant to be exclusive. People are free to draft their own form of POA but must comply with the legal standards set out in the ILPOAA and adopt the appropriate legal language.
I will now explain each of the SSFs under the ILPOAA:
Statutory Short Form Power of Attorney for Property
The Statutory Short Form Power of Attorney for Property is meant to enable a person to give an agent power over the person’s property and financial affairs. It gives the agent broad powers which include the power to pledge, sell, or dispose of any of the principal’s real or personal property, even without the principal’s consent or advance notice. Real property includes the person’s home, farm, apartment, business premises etc., while personal property includes automobiles, money, shares, inventory, equipment etc.
The principal may add on or limit any of the specified powers given to an agent in the SSF. In terms of limiting the powers of an agent, this can be done by striking out any of the specified powers in the SSF or stipulating specific limitation in the SSF. Examples of the specified powers of an agent in the SSF include the power to engage in the following: real estate transactions; financial institution transactions; stock and bond transactions; tangible personal property transactions; safe deposit box transactions; insurance and annuity transactions; retirement plan transactions; social security, employment and military service benefits; tax matters; claims and litigations; commodity and option transactions; business operations; borrowing transactions; estate transactions; and all other property transactions. In the SSF, the principal cannot name people as co-agents but can name a successor agent.
Statutory Short Form Power of Attorney for Health Care
The Statutory Short Form Power of Attorney for Health Care enables a person to designate another person to make medical decisions on the principal’s behalf. It may give the agent power over all medical issues the principal may need to be informed about and to consent to. The POA may also allow the agent to refuse or withdraw any type of health care for the principal. A parent may also give an agent all the powers the parent may have to control or consent to the health care of a minor child.
Who can create a POA in Illinois?
A person creating a POA in Illinois must be a person of sound mind and memory at the time of signing the POA.
As a general rule, as was indicated in the case of Palmer v. Miller, 380 Ill. 256, 43 N.E.2d 973 (1942), a minor cannot create a binding contract and therefore cannot create a principal-agent relationship. A minor can therefore not create a POA. The Illinois Juvenile Court Act of 1987 (705 ILCS 405/1-3) defines a minor as a person under the age of 21 years. However, there are some exceptions to this rule. For example, the Illinois Public Health Law (410 ILCS 210/1) gives a married person who is a minor, a parent who is a minor, a pregnant woman who is a minor, and any person 18 years of age or older, the legal capacity to give consent for health care services. These provisions presuppose that, these categories of persons can create a POA in respect of health care services. Further, a minor who is a parent may consent to medical treatments for their child.
A minor who falls under these categories in the Illinois Public Health Law may validly create a health care POA under their unique circumstances.
Also, a physician may treat a minor, 12 years or older for sexually transmitted diseases without seeking the consent of a parent or guardian. A minor,12 years or older may also consent to treatment for substance abuse problems without the consent of a parent or guardian. These minors can validly create a POA in respect of the power to consent to treatment given to them under the Illinois Public Health Law.
Who can be an agent under a POA in Illinois?
The ILPOAA defines an agent as an attorney-in-fact or other person designated to act on behalf of the principal. It further defines a “person” to mean an individual, corporation, trust, partnership, or other entity as appropriate to the agency. This means that non-natural legal persons can be appointed as agents under Illinois law. Thus, a company or corporation can be appointed to act as the agent of another person under Illinois law.
The following persons are considered incompetent to act as an agent under the ILPOAA: a minor, a person adjudicated to be incompetent by a court, a person with a disability or a person unable to give prompt and intelligent consideration to business matters, as certified by a licensed physician. These persons cannot act as an agent under a POA in Illinois.
Also, in Article IV of the ILPOAA, an attending physician or any other health care provider or health care professional who is administering health care to a patient (principal) may not act as an agent. However, a health care professional who is not administering health care to the patient (principal) may act as an agent.
What are the requirements for witnessing and notarization of a POA in Illinois?
A POA in the State of Illinois must be signed by at least one witness to be valid. There can be more than one witness if a principal so chooses. This requirement must be met whether or not a person decides to draft their own POA or use the SSF in the ILPOAA. In respect of a POA for health care under the ILPOAA, the law specifically state that the witness cannot be a person who is less than 18 years of age. This provision gives a benchmark for determining the legal age of witnesses in respect of a POA. Therefore, to qualify as a witness, the person must be an individual of sound mind and 18 years of age and/or above.
In respect of a POA for property, there is an additional requirement of notarization. A POA for property must indicate that it was signed before a notary public. Notarization is however not a requirement for a POA for healthcare under the ILPOAA.
When does a POA take effect and end?
A POA, unless otherwise provided in the document creating it, takes effect immediately the document is signed. The person creating the POA may indicate that it should take effect at a future date or upon the occurrence of a future event. For example, the person may indicate that the POA should take effect upon a court determining that the person has a disability or when a physician determines that the person is incapacitated.
The person creating the POA can limit the period of time which the agent can exercise powers under the POA. Under the ILPOAA, unless specifically indicated, the agent may exercise the powers given throughout the lifetime of the principal, both before and after the principal becomes incapacitated (this is known as a Durable POA).Note that all POAs in Illinois are Durable POAs unless otherwise provided in the document creating it.
The POA terminates upon the death of the principal except in some exceptional circumstances such as decisions on anatomical gifts, autopsy, disposition of remains or access to medical records under a POA for health care.
A person may also amend or revoke a POA during the lifetime. It must be noted that some POAs are irrevocable. An example is a POA coupled with an interest to a third party which cannot be revoked without the consent of the person who has a vested interest in the POA.
A court can also take away the powers of an agent if the court finds that the agent is not acting properly.
What are some minimum duties and responsibilities of an agent?
The ILPOAA imposes some duties and responsibilities on an agent. An agent has a duty to act in good faith for the benefit of the principal. The agent must act with due care, competence, and diligence. The agent must comply with the ILPOAA and other relevant laws. An agent must also keep a record of all receipts, disbursements, and significant actions taken on behalf of the principal.
Conclusion
Creating a POA is a crucial step in planning for the future and ensuring that your affairs are properly managed in the event of incapacity or unforeseen circumstances. By granting someone you trust the legal authority to make decisions on your behalf, you can have peace of mind knowing that your interests will be protected, and your wishes respected. Whether it's for managing financial matters, healthcare decisions, or both, a POA provides a clear framework for how your affairs should be handled if you are unable to do so yourself. It's essential to carefully consider who you appoint as your attorney-in-fact/agent and to clearly outline the scope of their authority in the document creating the POA. Regular reviews and updates are also recommended to ensure that your POA reflects your current wishes and circumstances. Overall, creating a POA is a proactive and responsible step towards effective estate planning and ensuring your wishes are honored.
References
- Justia. (2024, February 9). 2022 Illinois Compiled Statutes Chapter 705 – COURTS 705 ILCS 405/ - Juvenile Court Act of 1987. Article I - General Provisions.
- Justia. (2024, February 9). 2022 Illinois Compiled Statutes Chapter 410 - PUBLIC HEALTH 410 ILCS 210/ - Consent by Minors to Health Care Services Act.
- Justia. (2024, February 9). 2022 Illinois Compiled Statutes, Chapter 755 – ESTATES, 755 ILCS 45/ - Illinois Power of Attorney Act.
- Legal Zoom. (2024, February 9). Power of attorney requirements in Illinois: Types, limitations, and requirements.
- Palmer v. Miller, 380 Ill. 256, 43 N.E.2d 973 (1942).
- Power of Attorney, Black's Law Dictionary (11th ed. 2019), available at Westlaw.
