After serving the people of the State of Illinois valiantly for the last 24 years, the current form of the Illinois Power of Attorney Act rides off into the sunset this year, to be replaced by the new Illinois Power of Attorney Act, which goes into effect on July 1, 2011. A lot of folks get that glassy look in their eyes when you mention the Power of Attorney Act, and they start thinking, oh great, more legal mumbo jumbo.

If you’ve ever talked to a financial planner or an attorney who practices in the area of estate planning, chances are pretty good that they recommended that you have powers of attorney in place in the event that you would be incapacitated and unable to make decisions regarding your own affairs. No one likes to think about the possibility of that happening, so a lot of people put off completing the forms. But your estate lawyer wasn’t just trying to make an extra buck off of you (hopefully!). Having powers of attorney in place makes life a whole lot easier on your family, your medical care providers, and on you, when you recover from whatever condition incapacitated you in the first place.

There are generally two types of powers of attorney: a POA for property, and a POA for healthcare. As you can imagine, a POA for property grants another person (the agent) authority to make decisions concerning your property, sometimes even if you’re not incapacitated (e.g. authorizing your lawyer to close on the sale of your house for you if you’ve already moved). A POA for healthcare appoints an agent to make decisions about your treatment in the event that you are unable to do so yourself.

One of the beneficial aspects of the new Act is that it makes the process a lot more user-friendly for non-lawyers. The form for the POA has been carefully reworked to make it more easily understandable for the principal (the person signing the POA). Additionally, both principals and agents are given notices outlining the details of the POA document and how it functions. Many agents would probably not otherwise know some of the important points of being an agent, such as the duties they owe to their principal by agreeing to be the agent.

The new POA for healthcare includes some much-needed revisions from the 1987 Act. When the federal government enacted the Health Insurance Portability and Accountability Act (HIPAA) in 1996, it ushered in sweeping changes in the privacy of medical records. Because of HIPAA’s strict privacy rules, some agents found that medical care providers were unwilling to give them information about their principal’s health in certain situations, making the POA essentially useless. For example, many healthcare POAs contain provisions providing that the agent’s authority to make decisions only arises once the principal is incapacitated. However, the determination of whether the principal is incapacitated is often a question for the principal’s physician. If HIPAA prevents the physician from sharing information concerning the principal, how is the agent-in-waiting ever going to know if his authority as an agent has sprung to life?

The new POA for healthcare form solves this problem by granting the agent access to the principal’s medical records before the principal becomes incapacitated, but only granting decision-making authority after the incapacitation has occurred. Thus, the medical care provider is free to share information with the agent without fear of violating HIPAA’s regulations, and all parties are better able to determine whether the agent should step in and begin making decisions on behalf of the principal.

Another important aspect of the POA Act for medical care providers is that there are protections in place for providers who rely on a POA that is presented in the form prescribed by the POA Act. While POA forms that do not match the form contained in the Act can still be enforceable, if you have a POA in the standard form, there is a greater assurance that it will be honored without too much of a hassle.

One final change of note in the new Act is that it allows for greater flexibility in a principal’s decision of whether to make anatomical gifts (e.g. organ donation), and of how the principal wishes his or her remains to be handled after death.

While the new Power of Attorney Act provides for many other changes than the scope of this article allows, these are some of the more important ones, which ought to make a lot of folks take enough notice to consider either implementing a new POA, or revising the ones they currently have in place. While your old POA will still be effective, it’s definitely worth considering whether to upgrade to the new forms, given their significant revisions and the important protections they provide. iBi