Illinois Updates Power of Attorney Law: Clarity Emerges, But New Uncertainties Arise

A Power of Attorney, commonly called a “POA,” is an essential part of an estate plan. A Power of Attorney allows you to designate a person, known as an “agent,” to make decisions and take actions on your behalf regarding your healthcare or your property in the event you are unable to do so yourself. For example, what will happen if you are in a car accident and unable to tell a doctor how you wish to be treated? Or unable to access your bank account to pay bills and expenses while you are incapacitated? Your Power of Attorney allows your agent step in and legally handle your affairs.

The Illinois Power of Attorney Act requires hospitals, financial institutions, and others to comply with the instructions of your agent under a properly-created POA. Individuals and institutions can be subject to civil liability if they “arbitrarily or without reasonable cause” fail to comply with your agent’s instructions. However, that standard is ambiguous, and it is difficult for doctors, banks, and others to know what circumstances would justify a refusal to honor your Power of Attorney.

That changed in January 2025, when Illinois Public Act 103-0994 went into effect. The Act identifies five circumstances under which a refusal by a medical service provider, banker, or any other person to honor a Power of Attorney would be deemed unreasonable and give rise to potential civil liability:

1. the power of attorney is not on a form the third party receiving such power prescribes, regardless of any form the terms of any account agreement between the principal and third party requires;
2. there has been a lapse of time since the execution of the power of attorney;
3. on the face of the statutory short form power of attorney, there is a lapse of time between the date of acknowledgment of the signature of the principal and the date of the acceptance by the agent;
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, Successor Agent’s Certification and Acceptance of Authority, or Co-Agent’s Certification and Acceptance of Authority bearing the original signature of the named agent; or
5. the document appoints an entity as the agent.

In other words, none of the above reasons are a good excuse to refuse to accept a Power of Attorney.

However, the Act also includes a list of 14 exceptions, where a person may have reasonable cause to refuse a Power of Attorney:

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;
3. the person’s good faith referral of the principal and the agent or a person acting for or with the agent to the local adult protective services unit;
4. actual knowledge or a reasonable basis for believing in the existence of a report having been made by any person to the local adult protective services unit alleging physical or financial abuse, neglect, exploitation, or abandonment of the principal by the agent or a person acting for the agent;
5. actual knowledge of the principal’s death or a reasonable basis for believing the principal has died;
6. actual knowledge of the incapacity of the principal or a reasonable basis for believing the principal is incapacitated if the power of attorney tendered is a nondurable power of attorney;
7. actual knowledge or a reasonable basis for believing that the principal was incapacitated at the time the power of attorney was executed;
8. actual knowledge or a reasonable basis for believing: (A) the power of attorney was procured through fraud, duress, or undue influence, or (B) the agent is engaged in fraud or abuse of the principal;
9. actual notice of the termination or revocation of the power of attorney or a reasonable basis for believing that the power of attorney has been terminated or revoked;
10. the refusal by a title insurance company to underwrite title insurance for a gift of real property made pursuant to a statutory short form power of attorney that does not contain express instructions or purposes of the principal with respect to gifts in paragraph 3 of the statutory short form power of attorney;
11. the refusal of the principal’s attorney to provide a certificate that the power of attorney is valid;
12. a missing or incorrect signature, an invalid notarization, or an unacceptable power of attorney identification;
13. the third party: (A) has filed a suspicious activity report as described by 31 U.S.C. 5318(g) with respect to the principal or agent; (B) believes in good faith that the principal or agent has a prior criminal history involving financial crimes; or (C) has had a previous, unsatisfactory business relationship with the agent due to or resulting in material loss to the third party, financial mismanagement by the agent, or litigation between the third party and the agent alleging substantial damages; or
14. the third party has reasonable cause to suspect the abuse, abandonment, neglect, or financial exploitation of the principal, if the principal is an eligible adult under the Adult Protective Services Act.

So, while the new law provides some much-needed clarity regarding when Powers of Attorney may not be properly refused, the law also increases the burden of proving the validity of a Power of Attorney, and the numerous exceptions set forth in the new law threaten to swallow the rule.

Individuals should consider consulting a qualified attorney to ensure their Powers of Attorney will pass muster if a time comes when it will be necessary to use it.