The Positives of Planning for the Unknown -The Benefits of a Springing Power of Attorney.

By: Eli Graves, Associate Attorney, Peck Ritchey, LLC 

How is it possible to plan for the unknown? This is the question many are faced with when seeking  to put their affairs in order, and it is a question that becomes exceptionally more involved for  individuals attempting to account for Alzheimer’s or dementia.  

When faced with a diagnosis of Alzheimer’s or dementia, the most overwhelming aspect can  sometimes be the loss of management and control you have over your affairs. There are many  questions that surround estate planning generally, but there are a few specifically for people who know they may need to plan for eventualities during their own lifetime.  

Some of these questions are: 

1. What kind of authority do I have, and how can I give it to someone else?  2. What kinds of documents will my agent need to work on my behalf?  

3. When does my agent have the authority to act on my behalf?  

4. How do I ensure that my plans are followed?  

5. How do I avoid the process of court appointed guardianship?  

Generally, these questions can all be answered with thorough planning and effective Powers of Attorney, which you can use to appoint an agent who will manage and control your affairs at your direction.  

Assigning Authority to Your Agent and the Documents Required to do so.  

As an individual, you exercise agency on a day-to-day basis in ways that most people likely never consider. You choose when and where to spend your money. You choose the doctors you see and the treatment you receive. You choose when to delegate decision making to others, and when to disregard their advice to make a decision of your own choosing.  

With Powers of Attorney, you can assign any or all these powers to an individual of your own choosing. You get to decide who is vested with the authority to exercise agency on your behalf.  

There are two basic types of Power of Attorney. There is the Power of Attorney for Health Care, and the Power of Attorney for Property. A Power of Attorney for Health Care vests another person with the authority to make medical decisions on your behalf, while a Power of Attorney for Property vests someone with the authority to make financial decisions on your behalf.  

The Illinois Power of Attorney Act explicitly outlines the statutory powers and duties of an agent, which are generally incorporated by reference in a standard Power of Attorney document. The Power of Attorney Act further allows you, the principal, to expand or narrow the scope of your agent’s authority by indicating which powers they are granted, and which they are not. It is important to consult with your attorney regarding which powers you wish to be included, or excluded, from your Powers of Attorney to ensure that your agent has the authority to execute your plans. 

The Springing Power of Attorney and Involving Your Agent in Planning.  

Besides the two types of Powers of Attorney, there are also two different methods for determining when your agent will be vested with authority, which can be considered the Durable Power of Attorney and the Springing Power of Attorney.  

A Durable Power of Attorney is one that generally grants the agent the immediate authority to act on your behalf. While the Springing Power of Attorney is conditioned upon some future event to  trigger the provisions of the document and grant the agent authority.  

The most common events that trigger a Springing Power of Attorney are mental and physical   incapacity. In these instances, your agent is only granted the authority to act on your behalf when medical professionals deem that you are incapacitated, or upon the occurrence of a specific event  which you have previously identified in your Powers of Attorney. You can further use your Powers  of Attorney to establish when your agent ceases to have authority, if you are no longer  incapacitated and you regain the ability to act on your behalf. 

This type of Power of Attorney is particularly useful for individuals with Alzheimer’s or dementia because it allows them the security of knowing that someone, they trust will have the legal authority to make decisions for them. It also affords them the opportunity to have more extensive conversations regarding their wishes and plans with the person who is appointed to become their agent on the occurrence of some future event.  

This leads us to the answer to our fourth question, how to ensure your plans are followed. Your Powers of Attorney documents can be as broad or as narrow as you and your attorney want to draft them. However, one of the biggest drawbacks of leaving written documents for others to rely on is the possibility of conflicting interpretations. A Springing Power of Attorney can help you avoid this pitfall because it allows you the time to be actively involved in the interpretation of your own estate planning documents with the person who will be tasked with interpreting them. When you take the steps to proactively establish your estate plan, you can involve your designated agent in the process and further engage in an ongoing dialogue about how you would want them to act in future scenarios that may arise.  

Ensuring your agent is familiar with your intentions beyond the language on the face of the Powers of Attorney documents is equally as important as your communication with your attorney about which powers and authorities should be included in the Powers of Attorney to begin with.  

Avoiding Court Appointed Guardianship.  

A guardianship proceeding begins when the court is presented with evidence that someone is allegedly incapacitated in some form to the extent that they are unable to make decisions for themselves. The action is usually brought by a family member who is concerned with the individual’s well-being and is not sure what to do about it, so they seek direction from the court.  

Guardianship proceedings can oftentimes be contentious between family members who believe they know what is best for the incapacitated individual. On top of the potentially adverse nature of a guardianship proceeding, such proceedings take decision making out of the individual’s hands and puts it to the discretion of the court, which generally does not have intimate familiarity with the individual’s desired estate plan. 

When the court institutes guardianship proceedings, it is required to hear arguments from all sides and then attempt to construct what the court thinks the most accurate picture of the individual’s intents and best interests are. This can become problematic because the court, as a third party, may find it an impossible task to effectuate the individual’s wishes to the extent that such an individual would do it for themselves.  

As the hypothetical person in this scenario, consider how your different family members may argue over what they believe your intent is, and what they each think is in your best interests. Despite the best of intentions, this could still cause strife and discord between family members who all believe they are advocating for you. 

The solution to avoid this problem is the same one we have been discussing throughout this article, Powers of Attorney. When you establish a set plan that takes effect in the event you become incapacitated, costly guardianship proceedings can be mitigated or even avoided entirely. Under the Illinois Power of Attorney Act, a duly executed Power of Attorney effectuates your intent, and serves as evidence to the court that you have appointed a person you have confidence in to act on your behalf. Once a court has been presented with your Powers of Attorney, it becomes clear that you have established a plan for yourself, and the court will take into account your expressed wishes. This can help direct the court, ensure your family members are aware of your wishes, avoid unnecessary conflict, and keep down costs.  

Overall, the biggest question comes down to who you want to grant authority to another person to manage your affairs. You? Or the court? 

The Law firm of Peck Ritchey, LLC, affiliated for many years with the Illinois Chapter of the Alzheimer’s Association, has recently been named the Legal Education Partner of the Association. Kerry Peck, Managing Partner of Peck Ritchey, LLC serves as Chair of the Illinois Supreme Court Commission on Elder Law and previously as President of the Chicago Bar Association. Mr. Peck is Co-Author of Alzheimer’s and the Law and Don’t Let Dementia Steal Everything, books which he wrote at the request of the American Bar Association. Kerry Peck served on the Association’s Board for many years and the Law Firm was honored last year by the Alzheimer’s Association. Peck Ritchey LLC is a one-stop shop for families navigating the devastating effects of a loved one with Alzheimer’s Disease.