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Sarah Delano Pavlik and Tom Pavlik write a monthly column on legal and business issues for the Springfield Business Journal.


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Among other things, November is National Alzheimer's Disease Month, National Family Caregivers Month, National Home Care & Hospice Month and National Long-term Care Awareness Month.  (It's also National Peanut Butter Lovers Month, Banana Pudding Lovers Month and National Pomegranate Month, if you're interested.)  As an estate planning attorney, Alzheimer's, family care givers, hospice and long-term care naturally bring to mind issues regarding guardianships and powers of attorney.

    When a person, such as a mother, becomes incompetent, someone else will need to step in and make decisions for her.  Who will that person be?  Mom can decide for herself who will be in charge be executing powers of attorney.  Illinois law provides for two types of powers of attorney – one for property and one for health care.  Every adult should have both powers of attorney.  They must be signed by mom while she is still competent.  It is too late when mom has had a stroke or dementia or alzheimers has set in and mom no longer knows what she is doing.  It is possible to sign the documents if, in spite of a stroke or early dementia or alzheimers, mom still knows what she is doing, however, far too many people only call a lawyer when it is already too late.

    The property power of attorney governs all types of financial transactions unless the principal (mom) specifies otherwise.  Authorized transactions include those regarding: real estate; financial institutions; stocks and bonds; tangible personal property; safe deposit boxes; insurance and annuities; retirement plans; social security, employment and military service benefits; taxes; claims and litigation; commodities and options; business operations; borrowing; estates; and all other property powers and transactions.

    A property power of attorney does not automatically include the power to make gifts of mom's property, which may be important for tax or Medicaid planning.  The power to make gifts must be specifically added to the power of attorney.  The power of attorney also does not include the power to change a trust agreement or make a will for mom.

    As its name implies, a health care power of attorney governs medical decisions.  It governs all medical decisions including organ donation and the termination of life support (as specified by mom in the power of attorney).  A health care agent has the power to admit mom to a hospital, nursing home or institution.  However, mom can revoke the health care power of attorney at any time, even if she is not competent.  Therefore, it can be difficult if not impossible to involuntarily commit someone for mental health treatment using a health care power of attorney.

    Both the Illinois property power of attorney and health care power of attorney forms include a section stating that if a guardian for mom is ever necessary, she asks the court to appoint the agent under the power of attorney.

    The forms clearly state that mom cannot name joint agents under the powers of attorney, i.e., she cannot name two or more children acting together.  On a practical level, this is the best practice anyway, as appointing multiple agents can result in disagreements and an inability to use the power of attorney.  If mom is determined to name multiple agents, however, she can do so.  The statutory forms are not the only forms of power of attorney that can be used in Illinois.

    If mom does not have a power of attorney, then what?  For financial transactions, unless someone else has signing authority over certain assets (including, for example, if the assets are held in trust), the only other option is to have a guardian of the estate appointed.  If mom does not object to the guardianship or if she is undeniably incompetent, this can be a relatively straight forward procedure.  An "interested person" (generally a family member) files a petition with the court.  The petition must include an affidavit from a doctor stating that mom is incapable of handling her own affairs.  Mom must be served with process, i.e., the Sheriff's office or a private process server must deliver the papers to her, and all other interested parties must receive notice as well.  This includes a spouse, adult children, parents, adult siblings and any agent acting under a power of attorney.

    The court will appoint a guardian ad litem to meet with mom and report back to the court if he thinks a guardian is needed and if the proposed guardian is acceptable.  If mom wants to challenge the guardianship proceedings, she will also hire a lawyer or the court will appoint one for her.

    If the family is in agreement on who should be designated guardian, the court will generally appoint that person.  If there is not agreement, the court will first look to the person designated by mom.  As stated above, the statutory powers of attorney both include a statement that mom desires that the agent named under the power of attorney be appointed as guardian.  The appointment of a guardian does not void a power of attorney unless the court so provides.  So, it is possible to have a guardian with authority over some matters and an agent under a power of attorney with authority over others.

    So, what happens if mom appoints your brother as power of attorney and you think he is misusing mom's money or making bad health care decisions for her?  You can ask the court to order your brother to provide a full accounting for financial matters or ask the court to order a change in medical care.  If your brother refuses to do so or if improper conduct is found, the court can remove your brother as power of attorney and allow the alternate agent to serve, if there is one, or appoint a guardian for mom.  Similarly, if your brother is serving as guardian, he must file an accounting with the court.  If you believe he is not properly caring for mom, you can file an objection to the accounting.

    In order to avoid these disputes between siblings, the best practice is transparency.  Mom should tell the children who she has designated as power of attorney so the children know that is what mom wants.  The power of attorney should keep the other siblings informed of his actions.  If no information is provided, it is easy to suspect the worst.  Finally, if you think a power of attorney is bing abused, act sooner rather than later.  There are too many cases where a power of attorney used all of mom's money, and by the time it was discovered, it was too late.
Posted in: November, 2014
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