Power of Attorney is “[a]n instrument granting someone authority to act as agent or attorney-in-fact for the grantor” Black’s Law Dictionary (11th ed. 2019)
Power of Attorney is a state designated form that allows one person to act on another person’s behalf. This usually means the person granted power of attorney can make decisions for and then entering into contracts on the part of the person that granted them power of attorney.
This is a big deal! The ability to run around town and sign contracts which commit and obligate a separate person to God knows what? Who could possibly be trusted with such power? Only someone you were very close to like…a husband or wife.
So what is a power of attorney in Illinois and what happens to a power of attorney during and after an Illinois divorce.
What Is A Power Of Attorney In Illinois?
The Illinois Power Of Attorney Act does a pretty good job explaining why our society needs power of attorney.
“The General Assembly recognizes that each individual has the right to appoint an agent to make property, financial, personal, and health care decisions for the individual but that this right cannot be fully effective unless the principal may empower the agent to act throughout the principal’s lifetime, including during periods of disability, and have confidence that third parties will honor the agent’s authority at all times.” 755 ILCS 45/2-1
Power of attorney is really for when you can’t enter into the contract yourself…which is almost always due to the principal spouse’s disability, either temporary or permanent.
Powers of attorney in Illinois are standard forms for either property or health care.
The principal is the person who gives power of attorney to his agent.
“”Principal” means an individual (including, without limitation, an individual acting as trustee, representative or other fiduciary) who signs a power of attorney or other instrument of agency granting powers to an agent.” 755 ILCS 45/2-3(e)
“Agent” means the attorney-in-fact or other person designated to act for the principal in the agency.” 755 ILCS 45/2-3(b)
Once an agent is appointed as power of attorney “the agent shall act in good faith for the benefit of the principal using due care, competence, and diligence in accordance with the terms of the agency and shall be liable for negligent exercise.” 755 ILCS 45/2-7(a)
Acting in good faith for the benefit of the principal means the agent is doing what the principal actually told the agent to do. “An agent that has accepted appointment must act in accordance with the principal’s expectations to the extent actually known to the agent and otherwise in the principal’s best interests.” 755 ILCS 45/2-7(a)
The agent must keep scrupulous records to ensure they are and have always acted within the wishes of the agent.
“An agent shall keep a record of all receipts, disbursements, and significant actions taken under the authority of the agency and shall provide a copy of this record when requested to do so by…the principal” 755 ILCS 45/2-7(c)
This includes husbands and wives who are made agents in a power of attorney for their principal spouses.
Abuse Of Power Of Attorney Between Spouses In Illinois
Big consequences happen if an agent abuses the power of attorney.
“An agent that violates this Act is liable to the principal or the principal’s successors in interest for the amount required (i) to restore the value of the principal’s property to what it would have been had the violation not occurred, and (ii) to reimburse the principal or the principal’s successors in interest for the attorney’s fees and costs paid on the agent’s behalf. This subsection does not limit any other applicable legal or equitable remedies.” 755 ILCS 45/2-7(f)
Abuse of a power of attorney is almost always in the form of spending the principal’s money.
“A power of attorney creates a fiduciary relationship as a matter of law…The mere existence of a fiduciary relationship prohibits the agent from seeking or obtaining any selfish benefit for herself; if the agent seeks or obtains such benefit, the transaction is presumed to be fraudulent….Thus, any conveyance of the principal’s property that either materially benefits the agent or is for the agent’s own use is presumed to be fraudulent.” Collins v. Noltensmeier, 2018 IL App (4th) 170443, ¶ 25 (citations omitted)
Spouses are given a little more leeway than other people if they are the power of attorney for their spouse. Because the spouses live together and care for each other, there is not a presumption that the fiduciary (the power of attorney) is ripping off the other spouse.
“The general rule is that where a fiduciary relationship has been established, the burden rests upon the fiduciary to show the fairness of the questioned transaction. The rule that a presumption of undue influence is raised by the existence of the fiduciary relation, however, is not applicable to conveyances from husband to wife.” Miethe v. Miethe, 410 Ill. 226, 231 (1951)
However, if one spouse is definitely in a superior position to the other spouse, then undue influence may be raised.
“While confidential relationships necessarily exist between a husband and wife when they reside together under the ordinary conditions of marriage, nevertheless, it cannot be said as a matter of law that one of the parties is the dominant and the other the dependent party. Whether or not that be true is a question of fact.” Miethe v. Miethe, 410 Ill. 226, 231 (1951)
Any abuse of trust by a spouse acting as an agent for their spouse will inevitably be addressed in a divorce court.
“Dissolution proceedings are designed to dispose of all matters connected with the dissolution of a marriage” Davis v. Davis, 144 NE 3d 649 – Ill: Appellate Court, 3rd Dist. 2019
Illinois law wants everything handled in the same lawsuit, if possible. Illinois encourages “the elimination of repetitious suits and the relief of courts and litigants alike from the unnecessary burden of trying the same issues pending in another action.” Skolnick, 32 Ill.2d at 59, 203 N.E.2d 428.
What Happens To A Power Of Attorney After An Illinois Divorce?
People make their spouses their agents in power of attorney all the time. After all, if you cannot trust your spouse to handle your affairs, who can you trust?
Power of attorney agency lasts forever unless otherwise noted on the power of attorney.
“Unless the agency states an earlier termination date, the agency continues until the death of the principal, notwithstanding any lapse of time, the principal’s disability or incapacity or appointment of a guardian for the principal after the agency is signed.” 755 ILCS 45/2-5
Merely saying this power of attorney is over to the agent is enough to terminate the power or attorney.
“Every agency may be amended or revoked by the principal, if the principal has the capacity to do so, at any time and in any manner communicated to the agent or to any other person related to the subject matter of the agency” 755 ILCS 45/2-5
So, at any time before, during or after the break up, a spouse can terminate any agent/principal relationship created by power of attorney.
A divorce terminates the power of attorney in Illinois. The Illinois legislature wanted to emphasize this point so greatly that the Illinois legislature effectively said, “If they get divorced, presume they are now dead for the purposes of power of attorney.”
“If a court enters a judgement of dissolution of marriage or legal separation between the principal and his or her spouse after the agency is signed, the spouse shall be deemed to have died at the time of the judgment for all purposes of the agency.” 755 ILCS 45/2-6
A Power Of Attorney Does Not Give One Power To Be An Attorney
I would be remiss if I didn’t mention that a power of attorney does not bestow “attorney powers.” A power of attorney may be tempted to pursue a divorce for their relative/friend but they absolutely cannot do any filings on the principals behalf.
“Lay people may appear only….on their own behalf.” Blue v. People, 223 Ill. App. 3d 594, 596 (1992)
Filing a divorce on behalf of another person requires a guardianship NOT a power of attorney. Even then, it is very difficult to get a court’s approval to file for divorce on someone else’s behalf.
“Upon petition by the guardian of the ward’s person or estate, the court may authorize and direct a guardian of the ward’s person or estate to file a petition for dissolution of marriage or to file a petition for legal separation or declaration of invalidity of marriage under the Illinois Marriage and Dissolution of Marriage Act on behalf of the ward if the court finds by clear and convincing evidence that the relief sought is in the ward’s best interests. In making its determination, the court shall consider the standards set forth in subsection (e) of this Section.” 755 ILCS 5/11a-17(a-5)
If you and your spouse are principals or agents for each other…and you might get divorced, you need to start untangling each other from each other’s lives by cancelling your power of attorney now. Contact my Chicago, Illinois family law firm to get an agent (a divorce lawyer) that truly protects your interests.
