Estates & Powers of attorney

A Power of Attorney for Property is a legal document that lets a person choose someone to handle their money and make financial decisions for them.

The “principal” is the person who makes the power of attorney (POA) document. They give someone else, an “agent”, the power to make decisions.

The “agent” is the person named in a power of attorney document. The POA document gives the agent the power to make decisions on behalf of the principal. The principal can choose to give the agent power of all their financial matters, or only some of them

People 18 years and older can create a POA and name an agent. The principal must be mentally competent. This means they must be able to make decisions for themselves and understand what they are signing. If a principal is not mentally competent at the time POA is signed, the POA is invalid and cannot be used.

POAs can be as broad or limited as the principal wants. The principal can give the agent the power to make many decisions or only a few decisions. They also choose the timing of the POA. It can be effective immediately, or only when the principal is incapacitated and can no longer make decisions for themselves. 

An agent for POA property might have the power to:

• Buy, sell, rent, or lease real estate Property consisting of land or buildings like a house or an apartment 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 A loan given by a bank that is used to help someone buy a home property;
• Handle an estate, All of the property a person owns at their death and
• Manage Social Security, unemployment, and military benefits.

Remember, the principal can also limit the decisions that the agent may make for them. For example, the principal might want to let their agent have access to their bank accounts, but not let them buy or sell property. If so, the principal can prevent the agent from buying or selling property by saying so in the power of attorney.

The agent is empowered to make decisions on behalf of the principal, as stated in the POA. Once they have the power to act on the principal’s behalf, agents must put the principal’s welfare and interests first. Agents must act in good faith, An honest effort to do something for the benefit of the principal. They must use due care, competence, and diligence. Also, they must follow the principal’s wishes as much as they can.

Agents must keep complete and detailed records of all financial transactions they made on behalf of the principal. Agents must also attempt to preserve the principal’s estate All of the property a person owns at their death plan. The law also requires an agent to cooperate with the person who has the authority to make healthcare decisions for the principal. This may be the principal’s agent under Power of Attorney for Health care.

There are some things Illinois doesn’t allow an agent for POA property to do, this includes prohibitions against:

• Making gifts or changing financial beneficiaries without specific authorization,
• Signing or changing the principal’s will,
• Having conflicts of interest,
• Commingling funds,
• Borrowing money from the principal, unless they have authorization, and
• Continuing to act on behalf of the principal after they learn their power is terminated. This can be through the revocation of the POA, or the death of the principal.

It depends on what the principal says in the Power of Attorney document. The principal chooses the timing of the POA. The agent can be given their powers effective as soon as the POA is signed or on a future date. They can also say in the POA that the agent does not get any powers only when the principal is incapacitated and can no longer make decisions for themselves. In that case, the agent does not receive power until the principal's doctor determines the principal is incapacitated.

No. As long as the principal has decision making capacity, as in they can express their wishes and understand the decisions they are making, they have the final decision making power. This means that if an agent wants to make a decision that the principal disagrees with, they can’t. The principal’s decision making authority always comes first.

Generally, an agent must be:

• Over the age of 18,
• Able to make their own decisions.

Agents should be someone the principal knows well and who they trust. Agents don't have to act just because they are named. Therefore, an agent should be willing to accept the responsibility and take action. 

Before naming someone their agent, a principal should contact that person. Agents don't have to act just because they are named. People should make sure the agent is willing to accept the responsibility of being their agent and take action when needed.  People should carefully discuss the agent’s responsibilities and their wishes related to the power of attorney. These steps will help ensure that the agent follows the principal’s instructions and makes decisions that are based on the principal's wishes.

No, the agent does not have to be someone in the principal’s family. Many people pick a family member to act as their agent. However, the agent can also be a:

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

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.

No, a principal cannot have more than one agent acting at the same time. In Illinois, there can only be one, primary agent. If the primary agent dies or can’t make decisions for the principal, then a second agent (the “successor agent”) would act. Naming successor agents is generally a good idea because sometimes an agent becomes sick and can't handle decisions for the principal. Or, the agent could decide they do not want to handle the decisions.

Yes, the principal can make changes to their POA at any time, as long as they have decision making capacity. The changes must be made in writing, signed, dated, and notarized.

Note: In Illinois, powers of attorney for property must be notarized to be effective. Therefore, any changes need to be notarized. Powers of attorney for health care do not need to be notarized.

Yes. The principal can end a POA at any time. This can be done by signing a revocation form, creating a new POA that cancels the old one, or clearly showing they want to end it. An agent can also resign their status as agent.

Learn more about ending a Power of Attorney.

If a person becomes unable to manage their money or property and does not have a POA, no one automatically has the right to help. Even a spouse or adult Any person 18 years old or over child cannot step in without legal authority.

In that situation, someone may need to go to court to ask to be named a guardian of the person’s estate. This process can take time and cost money. The court will decide who should be in charge, and it may not be the person the individual would have chosen.

While the case is pending, bills may go unpaid, accounts may be frozen, and important financial decisions may be delayed. Having a POA helps avoid these problems by letting someone act right away if needed.

An agent's powers automatically end when the principal dies. The agent has no power over a principal's belongings or finances after the principal dies.

A power of attorney for property is not a substitute for a will. They serve Giving court documents to someone two different purposes. POAs are for when the principal is alive. Wills address property handling after someone dies. 

An agent’s power to handle a principal’s property ends when the principal dies. If there is a will, a person is named the “executor” Person in charge of giving out the property left in a will of the estate, All of the property a person owns at their death and can handle the decedent’s Someone who has died property. If no will is in place, then a court will need to decide how to handle the decedent’s property. The court must give the property to who the law says is the heir, Anyone who receives property from someone who has died which may not match what the principal wanted. Having a POA has no effect on what happens to a person’s property after they die.

The term “durable power of attorney” is not used in Illinois law. In other states, some call their POAs “durable” POAs when they are designed for the agent to keep decision-making power when the principal loses their capacity to act. In Illinois, POAs can be written to give an agent power when a person loses their decision making ability. The document itself is just not called a “durable power of attorney.” It’s just a “power of attorney.”

No, people can create powers of attorney on their own. Estate All of the property a person owns at their death planning can get complicated, though. If you’d like to speak with a lawyer, Someone who represents clients in courts or who gives legal advice you can use Get Legal Help to find one near you.