January 1, 2025

As of January 1, 2025, Public Act 103-994, codified at 755 ILCS 45/2-8, introduces significant changes to the requirements for Powers of Attorney (POA) for Property in Illinois. These updates are designed to clarify agent responsibilities, reduce the risk of misuse, and ensure consistency with modern legal standards. However, older POA documents may no longer meet these enhanced requirements, potentially creating challenges for agents and principals alike.

What Makes It Reasonable for Third Parties to Refuse a POA?

Many financial institutions have become increasingly reluctant to honor Powers of Attorney, citing various concerns about their validity or scope. While Illinois law generally expects third parties to accept properly executed POAs, certain situations make it reasonable for them to refuse. These include:

1. Facial Defects: If the POA contains obvious errors, such as missing signatures, improper notarization, or insufficient witnessing, a third party can reasonably question its validity.
2. Unclear or Overbroad Language: If the POA lacks specificity about the agent’s authority—a requirement strengthened by the new law—a third party may reject it to avoid potential liability.
3. Red Flags of Fraud or Coercion: Suspicions of fraud, duress, or undue influence can justify a refusal. Financial institutions are particularly vigilant about protecting vulnerable individuals from exploitation.
4. Noncompliance with Updated Standards: POAs that fail to meet the requirements of Public Act 103-994, such as lacking an agent’s acknowledgment of responsibilities or the required notices, can be legitimately challenged.
5. Expired or Revoked Authority: If the POA has been revoked, or the agent’s authority has expired according to the terms of the document, a third party’s refusal is reasonable.

Why Updating Your POA is Critical

With the growing reluctance of financial institutions to accept outdated POAs, it is essential to ensure your document complies with the latest legal standards. An updated POA:

• Addresses New Requirements: Ensures compliance with Public Act 103-994, including express authority provisions and mandatory agent acknowledgment.
• Minimizes Rejection Risk: Reduces the likelihood that a third party will find a legitimate reason to refuse your agent’s authority.
• Protects Your Agent: Prevents delays and challenges that could arise during critical moments when timely action is necessary.

Failing to update your POA could leave your agent unable to act on your behalf, causing unnecessary delays and potentially serious financial consequences.

Schedule Your Appointment Today

At A.H. Steinmetz, Ltd., we specialize in ensuring that your estate planning documents meet the latest legal requirements. Let us help you review and update your Power of Attorney for Property to protect your interests and those of your loved ones.

Contact us today to schedule an appointment!