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Your Most Important Legal Document?:
The New Illinois Power of Attorney Act

A Durable Power of Attorney for Property and a Durable Power of Attorney for Health Care are among the most important documents that everyone over age 18 should acquire. A Power of Attorney is a legal document giving another person, an “agent”, legal authority to act on your behalf. A Durable Power of Attorney authorizes your agent to continue to act for you after you become incapacitated.

Why are these so important? Durable Powers of Attorney allow someone you choose to make decisions for you both financially and medically. The fact is that at some point in everyone’s life they might become incapacitated and unable to make decisions for themselves. The period of incapacity may be short or may continue for many years. With few exceptions when an individual turns 18, no one else has the legal authority to make medical or financial decisions for him or her. That is why each of my children on their 18th birthday has received Durable Powers of Attorney authorizing me to act on their behalf. Without those documents, I would not have authority to make medical decisions on their behalf in case of an emergency. I also could not access their money to pay their bills or talk to their creditors.

If you become incapacitated without Durable Powers of Attorney, it may be necessary to go to Court to have a Guardian appointed for you to make decisions on your behalf -- both a time consuming and expensive process. In that circumstance, you are not guaranteed that the person the Court appoints to be your Guardian is the person you would want looking out for your interests. With Durable Powers of Attorney in most cases, no one will have to go to Court. Durable Powers of Attorney for Property allows your agent to carry out financial tasks for you, including paying your bills, managing your property, and handling your other financial matters. This document will allow your agent to represent your interests with various private and public entities. A properly drafted Durable Power of Attorney for Health Care allows your agent access to your medical records, your health care providers, and lets your agent make medical decisions for you when you are unable.

Beginning July 1, 2011 the new Illinois Power of Attorney Act came into effect substantially modifying the prior law. New statutory Durable Powers of Attorney better protect principals, agents, and third parties, while hoping to be more user-friendly and provide more protection to the principal from financial or physical abuse. Unlike the old law, the new Durable Powers of Attorney Act:

• Elevates the agent’s standard of care, requires more oversight of the agent’s actions, andexpands the remedies against an agent who abuses his or her fiduciary responsibilities.

• Provides notice to an agent under the Durable Powers of Attorney for property that describes his or her responsibilities.

• Limits who may act as a witness to the execution of a Durable Powers of Attorney to avoid conflicts of interest.

• Requires the agent “act in good faith for the benefit of the principal using due care, competence and diligence” instead of just exercising “due care.”

• Requires the agent act in accordance with the principal’s expectations to the extent actually known and otherwise in the principal’s best interests.

• Requires the agent to maintain an accounting of receipts, disbursements and significant actions at all times, not just when the principal is incapacitated.

• Immunizes an agent for another agent’s actions unless that agent participates in or conceals a breach of fiduciary duty committed by the other agent.

• Requires an agent who knows of a breach or imminent breach of fiduciary duty by another agent to notify the principal. If the principal is incapacitated, the agent must also take whatever actions reasonably appropriate to safeguard the principal’s best interests.

• Defines and gives standing to a list of “interested parties” who can bring an action against an agent or even request an agent’s records if they believe the agent is not acting in the principals best interest.

• Provides additional reassurances to financial institutions who act in reliance on the Durable Power of Attorney.

With all these changes, if you have pre-existing Durable Powers of Attorney under the old law, do you prepare and execute new Durable Powers of Attorney? If you do not wish to execute new Durable Powers of Attorney, your pre-existing Durable Powers of Attorney will remain valid and enforceable as long as they complied with Illinois law as it existed at the time of execution. However, as a practical matter, the new form may be more readily accepted by both financial institutions and medical providers. If you have not had your estate planning documents reviewed in the last three years, now would be a good time to schedule an appointment with your attorney to review your estate documents and get the new Durable Powers of Attorney. If you do not have pre-existing Durable Powers of Attorney, now is the time to contact your lawyer to prepare these documents for you. After all, they could turn out to be your most important legal documents.

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Boomers Resource Guide is a special supplement to the Senior Citizen's Guide