Powers of Attorney
A power of attorney is a document whereby you can appoint someone as your agent, to act on your behalf with respect to the matters specified in the power of attorney. For instance, sometimes a person who is closing a real estate transaction is unable to appear at the closing and sign the requisite documents. Perhaps they live in another state, or are ill, or must stay home to attend to a sick child or an elderly parent. In such circumstances, that absent party can grant a power of attorney to another individual, authorizing them to appear at the closing of the transaction and act on their behalf, even so far as signing documents on their behalf. The act of an authorized agent under a power of attorney is just as valid and binding on the giver of the power, as if the giver personally appeared and concluded the transaction in person.
In a more common setting today, the power of attorney is granted by an aging parent, often to an adult child, authorizing the adult child to act as their agent for matters dealing with the parent’s property, or to make health care decisions for that parent. Under Illinois law prior to 1987, if the giver of the power of attorney lost their faculties and became mentally disabled, then the agent’s authority under the power of attorney was automatically revoked during the period of disability. That was a real impediment to the effective use of a power of attorney. In the elderly parent setting, the entire purpose of granting the power of attorney was to enlist someone to assist the elderly parent in managing their property and health care affairs. To have that authority revoked by the mental incapacity of the giver of the power of attorney would defeat the main purpose of granting the power of attorney.
In 1987, the Illinois legislature enacted the Illinois Power of Attorney Act. Under Section 2-6 of this Act, al
l acts of the agent within the scope of the agency during any period of disability, incapacity or incompetency will continue to bind the giver of the power of attorney. This change in the law made Illinois powers of attorney much more useful and a necessary document in every good estate plan.
Now, as useful as a power of attorney is during the life of the giver of the power, there is one circumstance where the power of attorney is of no use—after the giver dies. While the Illinois Power of Attorney Act makes Illinois powers of attorney “durable”, they don’t make them that durable. Their have been many times where I have received a phone call from a child of a client who had died a day or two prior, telling me that they were going to close their deceased parent’s bank accounts using their power of attorney. I immediately tell them that their power of attorney died with their parent and is of no use following the parent's death (save for the authorization under a health care power of attorney permitting the agent to make funeral arrangements and authorize an autopsy for the giver).
So, if you are acting as an agent under a power of attorney and the giver of your power of attorney dies, be aware of the fact that your authority under the power died with them. Cease all activity on behalf of the giver and get hold of an attorney, lest you take actions you were not legally authorized to take.