Statutory Amendments Affecting the Illinois Power of Attorney for Property – Boon or Bane for Estate Planning Attorneys?
Recently, lively discussion1 ensued among estate planning practitioner members of the Trusts and Estates Section on the ISBA Central Community discussion board regarding Public Act 103-0994, effective January 1, 2025, which amends the Illinois Power of Attorney Act (the “Act”) to add and describe unreasonable and reasonable causes for a third party to refuse to honor powers of attorney for property.2 The impetus for the Act’s amendment was to redress the perceived problem that it is not uncommon for third parties to unreasonably reject powers of attorney for property.
The five unreasonable causes to refuse to honor a properly-executed Illinois statutory short form power of attorney for property listed in the amended Act are: 1) the power of attorney form is not one proscribed by the third party receiving it; 2) time has elapsed since execution of the power of attorney; 3) time has elapsed between the execution of the power of attorney by the principal and when the agent has signed the acceptance; 4) the document provided does not bear an original signature, original witness, or original notarization but is accompanied by a properly-executed Agent’s Certification and Acceptance of Authority; and 5) the document appoints an entity as the agent.3
Many practitioners worry that the “reasonable” causes to refuse to honor powers of attorney for property allowed by the amended Act will trump the “unreasonable” causes to do so, resulting in even more rejections of Illinois powers of attorney for property. Specifically, some practitioners are concerned that third parties, particularly bigger financial institutions, will routinely refuse to honor Illinois powers of attorney for property that are not accompanied by both a Certification and Acceptance of Authority of the acting agent and a certification of validity from an attorney. The relevant added statutory language causing such concern is as follows:
“(f) Reasonable cause to refuse to honor. Reasons for which it shall be deemed reasonable cause for a third party to refuse to honor a power of attorney for property include, but are not limited to, the following:
(1) the refusal by the agent to provide an affidavit or properly executed Agent's Certification and Acceptance of Authority, Successor Agent's Certification and Acceptance of Authority, or Co-Agent's Certification and Acceptance of Authority;
(2) the refusal by the agent to provide a copy of the original document that is certified to be valid by an attorney, a court order, or governmental entity;
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(11) the refusal of the principal's attorney to provide a certificate that the power of attorney is valid; . . . .”4
Unlike the agent’s certification,5 the form for the attorney’s certification of validity is not provided in the amended Act. Consequently, practitioners are tasked with creating their own attorney’s certifications. Attorney Timothy S. Midura of Huck Bouma, P.C. has kindly shared some of his thoughts on how to proactively address the changes to the Act. Mr. Midura has suggested what he is calling a “Triad Approach,” which consists of concurrently including the following documents with every newly-executed power of attorney for property:
- “Affidavit of Execution”—This self-proving affidavit, signed by the principal and two witnesses with notarization, recites that the principal had the capacity to execute the power of attorney and was under no undue influence, interference, or constraint at the time of signing.
- “Attorney’s Certificate of Validity”—This affidavit signed by the principal’s attorney at the time of execution of the power of attorney for property states that the attached power of attorney for property is valid under Illinois law.
- “Agent’s Certification and Acceptance of Authority” (form provided in the statute prior to its amendment)—This certificate requires the acting Agent to confirm the power of attorney for property has not been amended or revoked and also certifies the current validity of the power of attorney for property.
Mr. Midura has shared drafts of the new forms he created for his Triad Approach, which are available for ISBA Trusts and Estates Section members.6
Estate planning practitioners will have to wait and see whether rejections of existing Illinois powers of attorney for property do, indeed, increase after the Act takes effect. If third parties insist on receiving certifications from agent and attorney for previously-executed powers of attorney for property in order to accept them, estate planning practitioners may be faced with fielding numerous requests from clients and potential clients to update their powers of attorney for property. If a power of attorney for property cannot be updated because the principal no longer has capacity, the estate planning practitioner will be faced with determining whether they are comfortable certifying the validity of powers of attorney executed days, months, or years ago.
Furthermore, it will likely become standard practice for attorneys—both estate planning practitioners and attorneys for financial institutions alike—to advise clients that an Illinois power of attorney for property must include an agent’s and attorney’s certification. Requiring the certifications allows the recipient and its attorneys to rely on the representations of the agent and certifying attorney, and disclaim any responsibility for determining the power of attorney’s validity. Since it is “reasonable” (as specifically provided by the amended Act) to require those certifications, it is also prudent for attorneys (i.e., to reduce or avoid malpractice claims) to recommend their clients refuse to honor powers of attorney for property unless accompanied by both an agent’s and an attorney’s certification. Consequently, estate planning attorneys in general practice law firms should also consider cautioning their colleagues representing businesses or financial institutions to advise against accepting powers of attorney without certifications. Mr. Midura has provided a sample firm advisory notice on the ISBA Central Community discussion board.7
In light of the impending changes becoming effective on January 1, 2025, estate planning practitioners should begin considering how to: 1) change their forms and approach to preparing new Illinois powers of attorney for property; 2) communicate with current and past clients regarding their existing powers of attorney for property; and 3) respond to requests for certification documents for clients’ or potential new clients’ prior powers of attorney for property.
Once the initial flurry of activity to decide best practices and to make revisions to powers of attorney for property has passed, estate planning practitioners may ultimately conclude that newly-executed powers of attorney for property adhering to the new requirements are more effective for their clients. Like prior substantive changes to the law, only time will tell as to the practical effect of the Act’s amendment.
A special thanks is given to attorney Timothy S. Midura of Huck Bouma, P.C., who first raised these issues for discussion amongst members of the Trusts & Estates Section, provided feedback to the authors in preparing this article, and shared drafts of the new forms he created for his Triad Approach and his suggested firm advisory notice.
Mia O. Hernandez and Jennifer Bunker Skerston are the Co-Editors of ISBA’s Trusts and Estates Section Newsletter. Ms. Hernadez is a shareholder at Webber & Thies, P.C. in Champaign, Illinois, and Ms. Skerston is a partner at Law Offices of Reilly & Skerston, LLC, in Ottawa, Illinois.
1. The discussion can be viewed here by ISBA Trusts and Estates Section members: https://central.isba.org/discussion/impending-doom-of-powers-of-attorney-for-property-in-illinois.
2. See 755 ILCS 45/2-8(e) & (f).
3. 755 ILCS 45/2-8(e).
4. 755 ILCS 45/2-8(f).
5. 755 ILCS 45/2-8(b).
6. Timothy S. Midura’s draft forms can be downloaded here: https://central.isba.org/viewdocument/impending-doom-of-powers-of-attorne-1?CommunityKey=b34a5a29-f80e-4c4b-82fe-3a08cff610d0&tab=librarydocuments.
7. See https://central.isba.org/discussion/impending-doom-of-powers-of-attorney-for-property-in-illinois.