On July 1, 2011, the new Illinois Power of Attorney Act (755 ILCS 45/et seq.) (hereinafter “Act”) signed into law by Governor Pat Quinn in July of 2010 went into effect throughout Illinois providing principals more protection from abuse and fraud by agents.
One of the primary goals of the Illinois General Assembly in amending the old Act was to create a more user-friendly version of the statutory powers of attorney (hereinafter “POA”) form for both property and healthcare. Under the Act, the new statutory POA form will no longer be a one page form consisting of merely the designations, powers and restrictions. It will be made up of the actual POA form itself, a notice to the principal signing the POA on another page and a notice to the designated agent on a third. 755 ILCS 45/3-3(a).
The first page of the new statutory POA form for property and healthcare is entitled Notice to Individual Signing the Illinois Statutory Short Form Power of Attorney for Property (or Healthcare in the case of POA for healthcare). This page must be typed in 14-point font to ensure that the principal reads the notice because it provides the principal with an overview of the POA form and the powers granted to the agent by the principal. The new statutory POA forms must contain a line at the end of the notice where the principal should sign his or her initials to acknowledge that he or she has read the notice. The Act does provide, however, that the statutory POA will be valid even absent the principal’s initials on the acknowledgment line at the end of the form.
The final page of the new statutory POA form for property and healthcare is entitled Agent’s Certification and Acceptance of Authority. This form may be filled out by the agent and presented to a reliant (e.g. healthcare provider, bank, title company, physician) to provide assurance that the power of attorney form provided to the reliant is true and valid. The new Act also includes a “Successor Agent’s Certification and Acceptance of Authority” and a “Co-Agent’s Certification and Acceptance of Authority” form that can both also be completed by a successor agent or co-agent and provided to a reliant to certify that the successor agent or co-agent agent has full authority to act.
Even though the new Act requires that the POA forms be comprised of the form and the notices, it specifically provides that POA forms executed in compliance with the old Act will remain valid and enforceable. Additionally, the new Act also provides reciprocity for and validates POAs executed under the laws of other states or countries so long as they were executed in conformity with the laws of that state or country.
Another of the primary goals of the Illinois General Assembly in amending the Act was to provide additional protection for the principal after executing a POA. The new Act effectuates that intention by making changes that help prevent fraud, enable interested parties more power to intervene, requiring a higher standard of care by agents and elevating the level of accountability of agents.
Some of the general changes in the Act aimed at protecting the principal are:
Under 755 ILCS 45/2-5, there is no longer an automatic revocation of a POA that was previously executed unless the subsequent POA specifically provides that all previous and other POAs are revoked. Therefore, the new statutory POA forms both contain language revoking all prior POA for property and health care, respectively.
Under 755 ILCS 45/2-7, the standard of care an agent owes a principal has been elevated from simply using “due care” when exercising their duties to now acting in good faith for the benefit of the principal using due care, competence and diligence. Moreover, the agent must act in accordance with the principal’s expectations to the extent such expectations are actually known to the agent and, otherwise, in the principal’s best interests.
755 ILCS 45/2-7 also provides that an agent must keep a record of all receipts, disbursements and significant actions taken while acting as agent. The agent must also be prepared to provide such records upon request by certain specified individuals such as: (1) the principal, a guardian, another fiduciary acting on behalf of the principal, and, after the death of the principal, the personal representative or successors in interest of the principal’s estate; (2) a representative of a provider agency, as defined in Elder Abuse and Neglect Act, acting in the course of an assessment of a complaint of elder abuse or neglect under that Act; (3) a representative of the Office of the State Long Term Care Ombudsman, acting in the course of an investigation of a complaint of financial exploitation of a nursing home resident under the Illinois Act on the Aging; (4) a representative of the Office of Inspector General for the Department of Human Services, acting in the course of an assessment of a complaint of financial exploitation of an adult with disabilities pursuant to Section 35 of the Abuse of Adults with Disabilities Intervention Act; or (5) a court under this Act.
If an agent violates any provisions of the Act described above then he or she may be liable to the principal or the principal’s successors for the amount required to restore the value of the principal’s property to what it would have been had the violation not occurred as well as for the amount of any attorney’s fees and costs paid on the agent’s behalf. The agent may also face liability for actions not specifically covered by the Act as the Act does not limit any other legal or equitable remedies.
755 ILCS 45/2-10(f) outlines which “interested persons” may bring an action against an agent for acting against the interest of the principal, which includes: (1) the principal or the agent; (2) a guardian of the person, guardian of the estate, or other fiduciary charged with management of the principal’s property; (3) the principal’s spouse, parent, or descendant; (4) a person who would be a presumptive heir‑at‑law of the principal; (5) a person named as a beneficiary to receive any property, benefit, or contractual right upon the principal’s death, or as a beneficiary of a trust created by or for the principal; (6) a provider agency as defined in Section 2 of the Elder Abuse and Neglect Act, a representative of the Office of the State Long Term Care Ombudsman, or a governmental agency having regulatory authority to protect the welfare of the principal; and (7) the principal’s caregiver or another person who demonstrates sufficient interest in the principal’s welfare. The Act also specifically delineates the fees and costs that may be assessed in such an action under 755 ILCS 45/2-10(d)-(e).
755 ILCS 45/2-10.5(a)-(d) discusses the ability and restrictions of co-agents to act under a POA. A principal is not permitted to name co-agents if the statutory short form POA is being utilized. However, if a principal utilizes a non-statutory POA form, the Act states that co-agents may only act by majority consent and that one co-agent is not liable if another co-agent breaches his or her fiduciary duty unless the first co-agent conceals or participates in any such breach by the second co-agent.
Changes Specifically Applicable to Property Power of Attorney Form:
Under 755 ILCS 45/3-3(d), a statutory POA for property will not be effective unless it is signed by at least one witness and is notarized; however, the notary may not also act as a witness. Due to the fact that some jurisdictions require more than one witness, the new statutory POA form provides a signature line for a second witness to execute.
Under 755 ILCS 45/3-3.6, the following individuals may not act as witnesses to a property power of attorney: (1) The attending physician or mental health service provider or a relative of the attending physician or mental health service provider; (2) An owner, operator or relative of an owner or operator of a health care facility in which the principal is a patient or resident, which extends to directors and executive officers of an operator that is a corporate entity, but not other employees of the operator; (3) A parent, sibling, descendant, or any spouse of such parent, sibling, or descendant of either the principal or any agent or successor agent under the foregoing power of attorney, whether such relationship is by blood, marriage, or adoption; or (4) An agent or successor agent under the power of attorney.
As previously mentioned, an agent’s standard of care has been elevated under the Act from simply using “due care” when exercising their duties to now acting in good faith for the benefit of the principal using due care, competence and diligence. Therefore, under 755 ILCS 45/3-3(e) the agent is required to be provided with specific notice outlining his or her duties and specifies his or her liability if an agent acts outside of or in breach of those duties.
Changes Specifically Applicable to Healthcare Power of Attorney Form:
A statutory healthcare POA form will not be effective unless it is signed by at least one witness and unlike the POA for property form, the healthcare POA form is not required to be notarized. Under 755 ILCS 45-4-5.1, none of the following individuals may serve as a witness to a healthcare POA: (1) The attending physician or mental health service provider of the principal, or a relative of the physician or provider; (2) An owner, operator, or relative of an owner or operator of a health care facility in which the principal is a patient or resident, which extends to directors and executive officers of an operator that is a corporate entity, but not other employees of the operator; (3) A parent, sibling, or descendant, or the spouse of a parent, sibling, or descendant, of either the principal or any agent or successor agent, regardless of whether the relationship is by blood, marriage, or adoption; or (4) An agent or successor agent for health care.
One of the most important changes in the POA for healthcare form is that 755 ILCS 45/4-10(b) now provides that the principal intends for his agent to be his “personal representative” for the purposes of HIPAA and the agent’s authority to act as the “personal representative” takes effect immediately at the time the POA is signed and not only upon the principal’s death or incapacity. As a “personal representative”, the agent may authorize the release of the principal’s medical information to third parties as well as obtain the principal’s medical information from health care providers.
In addition to updating the healthcare POA form to meet current HIPAA concerns, it also has been updated to reflect more modern medical terminology. The new healthcare POA form eliminates the reference to an “irreversible coma” and replaces it with three separate terms found in the Illinois Health Care Surrogate Act: “permanent unconsciousness,” “incurable or irreversible condition” and “terminal condition.”
Under 755 ILCS 45/4-10(b), a principal now has the ability to state affirmatively that he or she does not wish to make an anatomical gift upon his or her death which expands on the former healthcare POA form that only permitted the principal to direct that some or all of the principal’s organs be donated upon his or her death.
Finally, the new Act grants the agent power to authorize autopsies and direct the disposition of the principal’s remains in accordance with the Illinois Disposition of Remains Act. The principal also has the ability under the new Act to appoint another individual other than the agent to control the disposition of his or her remains using a separate “Appointment of Agent to Control Disposition of Remains” form.