Tag Archives | Power of Attorney

Looking back at 2011: new powers of attorney

In Part 1 of our year-end review, we discussed the reemergence of the Illinois estate tax.  Next up are the changes to powers of attorney.

A new version of the Illinois Power of Attorney Act went into effect July 1, 2011.  The law changed the rules and statutory form for the Power of Attorney for Property and the Power of Attorney for Health Care.

No doubt, you are probably thinking, “what happens to the powers of attorney I signed 1 (or 2, 5, 10) years ago?”  Don’t worry.  If you have existing powers of attorney, you are not required to rush out tomorrow and sign new ones.

Of course, if they’re more than a few years old, you may still want to get them updated.  Banks sometimes question outdated powers of attorney (those more than 3 years old).  And if you’re over the age of 55, you’ll definitely want to consider a power of attorney with long-term care and elder law provisions (the statutory form which most people have does not address these issues).

While there are many technical changes to the Power of Attorney for Property, the most noticeable change is the ability to name multiple people to act as your agents simultaneously under a Power of Attorney for Property.  Your panel of agents can then act on your behalf by majority vote if you become incapacitated.

The new Power of Attorney for Health Care also provides broader access by your agents to your health care information if they need to act under the power of attorney.  These changes were made necessary by the HIPAA privacy rules that were published in August, 2002.  If you have a separate HIPAA authorization as part of your estate plan (and you do if we drafted your plan), you may not need to update your Power of Attorney for Health Care.

From a legal standpoint, I would describe the changes as a “solid upgrade”.  Something to be aware of, but not likely creating any need for action on your part—unless you were sorely lacking in the power of attorney department to begin with!

In Part 2, we’ll fill you in on the rest of the changes from 2011 and look ahead at what to expect in 2012.

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The power of attorney (not just) for property

With the rise of revocable living trusts for estate planning, the durable power of attorney has often been pushed into the background. But is is still a very important tool, even if most or all of your property is owned by a trust.

The ability to name an agent through a power of attorney is very flexible. You can give as few or as many powers to your agent as you wish. These are some of the more useful things an agent can do for you:

  1. Apply for public benefits for you. Your agent can file on your behalf to receive SSI or Medicaid benefits. Medicaid is an important way that many people use to pay for their nursing home care — something I will be discussing more in the coming weeks.
  2. Manage property not owned by your living trust. Unless an irrevocable life insurance trust is used, people often own life insurance in their own name. Your agent can also manage your IRA accounts, 401(k) accounts, or company pension account that an incapacity trustee would not be able to help with.
  3. Sign contracts on your behalf. Your agent can sign contracts for you, such as nursing home admission papers.
  4. Hire an attorney. An agent can hire an attorney to represent you in a variety of matters — medicaid planning, filing a lawsuit, filing for bankruptcy.
  5. Make gifts for planning purposes. You can authorize your agent to make gifts on your behalf for tax planning or Medicaid planning purposes.
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