ArticlesThe New Powers of AttorneyPowers of attorney have existed for a long time in Illinois, but only recently have they become a valuable estate-planning tool. Basically, a power of attorney is a written document which grants to a specific individual the power to act for the person who appoints that individual. The person who grants the power to act is the "Principal", and the individual who acts for the Principal is the "Attorney-in-Fact" or "Agent". In its simplest sense, a power of attorney is a contract between a Principal and his Agent. Before 1987 powers of attorney were of limited usefulness. For one thing, they only enabled the agent to act in matters concerning the principal's property and not his person regarding his health care. Secondly, there was a serious question as to whether the power of attorney was valid after the principal became incapacitated mentally. In fact, title companies often refused to honor a power of attorney if the principal were incompetent. Finally, the subsequent appointment of a guardian or conservator for an incompetent principal automatically invalidated or overrode the power of attorney. The last two factors of pre-1987 powers of attorney made them unreliable tools for use in estate planning. They just were not any good when you really needed them. In 1987, the legislature did two things for powers of attorney that were badly needed. First, it did to made them "durable". This meant that powers of attorneys specifically remained valid even though the principal later became incompetent. Therefore, a guardianship or conservatorship could be avoided easily and inexpensively by simply having the principal execute a power of attorney while he was still competent. If incompetency later occurred, the agent simply would handle the principal's affairs for him. The legislature also flip-flopped the old rule about the appointment of a guardian invalidating the power of attorney, so that the power of attorney took precedence over a guardianship. This was a significant move, as it would help avoid fights in families over who was to act for the principal, and it would allow the person whom the principal actually appointed to act. The second thing the legislature did was to create a new and different kind of power of attorney--one that would appoint an agent to deal with the principal's "person". This type of power of attorney is called "power of attorney--health care". Before 1987, the only way someone other than the principal could make any decisions about the principal's health care was as "guardian of the person", an individual appointed by the court for that very purpose. With a power of attorney--health care the need for that type of guardianship can be avoided. The time and expense of avoiding the appointment of a guardian of the person, however, is not the only benefit conferred by this new power of attorney. While the power granted to the agent allows him to act in all instances in making health care decisions, the document nevertheless enables the principal to limit the agent's power to the point where the agent is to act according to specific instructions. This becomes very important when the question for the agent is whether life sustaining treatment is to be given, withdrawn or withheld from the principal, a fairly common issue today given the high technology of medicine. On this very point, the legislature provided three choices for the principal to choose from regarding life-sustaining treatment:
The above options are not the only one a principal can choose, however. He can write his own instructions. Therefore, a great deal of flexibility is available to him, although the options already provided by the legislature do adequately cover most desires. Of the three options available, the first seems to be the one chosen most often in this writer's experience. The principals seem to like the agent they have appointed to be the final arbiter in all circumstances, assuming he will undoubtedly consult with the doctor anyway. One cannot always count on his personal physician being the actual doctor who will be treat him. Illness can strike anywhere; so there is no guaranty you will be near home where the family doctor is available. On the other hand, the appointed agent is the agent no matter where the principal is hospitalized and will be the constant factor needed. Health Care Powers of Attorney do not authorize euthanasia or physician assisted suicide, because current Illinois law does not authorize them. For those who are concerned about a change in that law, there is suggested language for the health care power of attorney, which will prohibit such measures even though the law may someday permit them. This language is not in the statutory form, but instead must be specifically inserted if that protection is desired. How does powers-of-attorney--health care mesh with Living Wills? Basically, they overlap with the power of attorney being much broader in scope. A living will really only applies in the most severe circumstances (i.e. where the principal has a terminal condition and his death is imminent except for the intervention of life sustaining treatment), whereas the power of attorney--health care applies in all circumstances. Living wills also do not name a specific individual to make health care decisions for the principal, whereas the power of attorney does. Also, and probably most important of all, the living will does not prevent family members from going into court, being appointed guardian of the person and trying to override the living will. As has been stated above, the power of attorney generally takes precedence over a court appointed guardian. Some Features About Both Kinds Of Powers Of AttorneyThe law only allows one person to be appointed agent at a time. This may seem foreign to some people, since it is very common to, for instance, name both or all of one's children as co-executors in a Will. The one-at-a-time requirement seems to have been put in the law to avoid conflicts within the family of the principal. By only allowing one person to act at a given time, other members of the family cannot legally interfere with the agent's decision, which enables the agent's determination to be final. The statute governing powers of attorney does allow "successor agents" to be named, however, and by all means, this is recommended as agents themselves die, become incompetent, refuse to act or become unavailable. In such circumstances, the first named successor agent can step in and act. There is no limitation on the number of successor agents that can be named, although two to three successors are generally sufficient. There is a place on each type of power of attorney where the agent and successor agent(s) can sign their names, with the principal certifying the authenticity of their signatures by signing his name opposite the agent's. This is not required for the power of attorney to be valid. All it does is act as a way of easily proving the agents' identity to third parties that are honoring the power of attorney. In other words, the certification of the agent's signature is similar to a bank signature card. This feature can be extremely helpful where the agent is having to act away from his home where he is not known. Powers of attorney allow the principal to state a starting date when the power will become effective, and likewise a termination date when the powers conferred will end. By law a power of attorney-property automatically ceases to be effective on the death of the principal. A power of attorney -health care can be valid beyond the death of the principal so the agent can handle funeral arrangements or otherwise dispose of the principal's remains. The starting date can be the date the power of attorney is signed by the principal, or it can be a specific date in the future or it can be nonspecific by tying it to some event such as the incompetency of the principal. The last possibility can be a problem, since determination of incompetency is usually made by a court, and going to court is one thing the power of attorney is designed to avoid. Allowing the power to become effective the day the document is signed allows the agent to be ready to act at any time. Empowering the agent to act immediately may seem at first to be a little dangerous, and technically it is. By doing so, the principal is enabling the agent to start acting, and the principal may not want him to do so at that time. This problem is alleviated, however, by two things: First, a power of attorney should only be conferred on an agent whom the principal trusts. Certainly, an understanding should be had that the purpose of the power of attorney is to make matters easier at a time when things otherwise are complicated (i.e. during the principal's incompetency). With such an understanding, the agent will only act when it is necessary. Secondly, by law powers of attorney are REVOCABLE by the principal as long as he is competent. So, if the principal is in disagreement with his agent, he has the right to withdraw the agent's power to act, thus overriding any decision the agent might make. For those principals who do not have the utmost confidence in their agent, a provision can be inserted which requires a doctor's opinion as to the principal's incompetency before the power will become effective. This can cause undo delays, however, something which the power of attorney is meant to avoid. Generally, family members are chosen to act as the agents, and they are the best candidates, since they know the principal's business affairs and desires regarding his health and views on death. Typically, if both spouses are living, they can name each other as agent. Children can be named as successor agents. Even though incompetency, for the most part, strikes the aged, young people should consider executing both types of powers of attorney. An automobile accident, brain tumor or other malady can place anyone of any age in a coma. A power of attorney is an inexpensive way to avoid the legal complications that arise when the principal is unable to manage his property or make decisions regarding his health care. For this reason, I recommend powers of attorney to everyone for whom I draw a Will or Trust. Prepared by:
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