Money & Debt

Powers of Attorney

A Power of Attorney (POA) is a legal document that you can use to name a person to make decisions for you. They are often used to prepare for future situations when you can no longer make these types of decisions for yourself. In this relationship, you are the Principal, or the person for whom the decisions are made. The person you select to make the decisions for you is the Agent.

There are 2 main types of POAs:

• For property (used for financial decisions), or
• For healthcare (used for healthcare decisions).

You may make these documents as broad or limited as you want. You can do this by giving the Agent the power to make many decisions or only a few decisions. You can also choose whether you want the POA to be effective immediately, or if you want it to work when you are incapacitated and can no longer make decisions for yourself. 

Who can be an Agent

Generally, an Agent must be:

• Over the age of 18,
• Able to make his or her own decisions, and
• Someone other than your primary healthcare provider (i.e. your doctor or caregiver) for a healthcare power of attorney. 

Some paid caregiver agreements do not allow caregivers to act as agents under POAs. Many people pick a family member to act as their Agent. However, you don’t have to pick someone in your family. Your Agent can also be a(n):

• Friend,
• Unmarried partner,
• Trusted advisor, or
• Neighbor.

The important thing is to pick someone you know well and who you trust. The individual must be willing to act for you if you need help with your financial or medical problems. 

Agents don't have to act just because they are named. Therefore, you want to make sure the Agent is willing to accept the responsibility and take action. So before you name your Agent, you should contact that person. Confirm that he or she is willing to act for you. You should also carefully discuss the Agent’s responsibilities and your priorities related to the power of attorney. These steps will ensure that your Agent will follow your instructions and make decisions that are consistent with your wishes. 

If the person you choose as an Agent decides to act as your Agent, they must act in good faith for your benefit. They must use due care, competence, and diligence. Also, they must follow your wishes as much as they can.

The Agent you appoint doesn’t have to be local. The Agent doesn't even have to be a resident of Illinois. However, in the event of an emergency, it is helpful if the agent lives nearby.

You cannot have more than one Agent acting at the same time. In Illinois, if you want to name more than one Agent, you must make one of them your primary Agent. If that Agent dies or can’t make decisions for you, then your second Agent (the “Successor Agent”) would act for you. Naming successor agents is generally a good idea because sometimes an agent becomes sick and can't handle decisions for you. Or, the agent could decide they do not want to handle the decisions.

Power of Attorney for Property

As its name suggests, a POA for property covers transactions like buying property.  

The Illinois Power of Attorney Act specifies the transactions that agents are allowed to manage. Under a POA for property, agents can:

• Buy, sell, rent, or lease real estate or other property,
• Control bank accounts (including paying bills),
• Contribute to or withdraw from a retirement plan,
• Deal with any type of insurance or annuity policy,
• Handle tax matters,
• Buy and sell stocks,
• Control safe deposit boxes,
• Hire an attorney to file or defend against lawsuits relating to property interests,
• Run a business,
• Borrow money and mortgage property;
• Handle an estate, and
• Manage Social Security, unemployment, and military benefits.

However, your Agent may not make gifts or change beneficiaries without specific authorization. Also, your Agent can never sign or change your will.

The Notice to the Agent under the POA for Property states that the Agent has the following duties:

• Do what the Principal reasonably expects the Agent to do with the Principal’s property,
• Act in good faith for the best interest of the Principal, using due care, competence, and diligence,
• Maintain complete and detailed records of all receipts, disbursements, and significant actions taken on behalf of the Principal,
• Attempt to preserve the Principal’s estate plan, and
• Cooperate with the person who has the authority to make healthcare decisions for the Principal – this may be the Agent under Power of Attorney for Healthcare.

The Notice to the Agent under the POA for Property states that the Agent cannot:

• Engage in conflict of interest,
• Act beyond the authority granted in the POA for Property,
• Commingle funds,
• Borrow funds from the Principal, unless they have authorization, or
• Continue acting on behalf of the Principal after they learn that the power is terminated (in the event of the death of Principal, revocation of duties, or dissolution of marriage).

Once the Agent begins acting on your behalf, they must put your welfare and interests first. If the Agent manages your finances, he or she must be able to provide receipts and records of all transactions. The Agent must manage your accounts and property as if they were in your shoes. If the Agent acts appropriately, they are not financially responsible for your affairs.

A POA for Property may be effective immediately unless you limit the time period. An Agent that acts before those times violates their duty. To further protect yourself, you may want to limit the document's valid time frame. Additionally, you should pick an Agent you know will not act before it is appropriate. You can also add other limits to the document. You can specify, for example, that the POA is valid only after your doctor says that you can no longer make your own decisions. Generally, no one can handle financial affairs on your behalf without a POA for Property.

You can use our Power of attorney for property program to make the forms.

Power of Attorney for Healthcare

An Agent with a POA for Healthcare can make healthcare decisions for you. This includes directing or refusing healthcare interventions or stopping treatment.  

Serious illness and accidents are unpredictable. By planning ahead, you can ensure you will get the medical treatment that you want. You should choose an Agent who will make decisions on your behalf that are in line with your personal values and wishes.

Learn more about Power of Attorney for Health Care basics and common questions.

You can use our Power of Attorney for Health Care program to make the forms. 

Selecting an Agent you trust

By properly selecting an Agent and completing the POA documents, you can avoid future pressure from people who may not have your best interests in mind. Picking an Agent you trust may be the most important step to ensure that your wishes are followed. It can also help avoid future exploitation. 

Although you may revoke a POA for Healthcare at any time, you may only revoke a POA for Property if you retain the ability to make your own decisions. Further, for both types, you can only sign new documents appointing a new Agent if you have the capacity to sign new documents. So, it is best to consider the consequences of revocation before taking these steps. There is an option to delay the revocation for 30 days after you communicate your intent to revoke.

Fraud and abuse

In Illinois, Agents have to keep certain records about their role, like receipts for how they have spent the Principal's money. If asked, Agents have to give those records to:

• The Principal, their guardian, or their estate if they are deceased,
• Certain government actors, like the public guardian or the Office of the State Guardian, or
• The court.

Getting records from the Agent can help determine if there is fraud or abuse.

One of the main reasons for drafting and signing a POA is to avoid abuse if you are unable to make your own decisions in the future, because you expect your trusted agent to make the right decisions for you. However, if your Agent commits fraud, exerts undue influence, or violates their duty of care, there are many remedies available. These remedies include:

• Revocation,
• Asset recovery,
• Demanding an accounting,
• Seeking guardianship, or
• Order of Protection.

If you are a victim of POA fraud, a civil suit may be filed under a number of Illinois state laws, including:

• Illinois Adult Protective Services Act,
• Nursing Home Care Act, or
• Financial Exploitation of an Elder or Person with a Disability law.  

Also, there may be criminal penalties for the Agent’s violations. 

To report suspected abuse, neglect, or exploitation of an older person, call the Illinois Adult Protective Service Hotline at (866) 800-1409.

The best way to protect yourself is to make proper plans and decisions in advance. Signing a POA may be one of the best methods of protection from future potential neglect or abuse, should you lose the capacity to make personal decisions.  A POA provides great peace of mind, as you know that your wishes will be followed. You can also be assured that your instructions will be carried out if you lose the ability to make your own decisions. 

Think very carefully about signing a POA and naming an Agent. It is important to remember that your Agent generally acts when you are most vulnerable and can no longer make decisions for yourself.