Giving Power to Your Powers of Attorney

Alan Press is an ATG Trust Member Attorney who wrote the following article. We thought the information was important and asked to share his article with our readers. We hope that you find the following helpful to your practice.

When designing an estate plan for your client, much of the attention and focus is given to the substantive provisions of the living trust or the will. The ancillary documents, including the Illinois Statutory Short Form Power of Attorney for Property (755 ILCS 45/3-3 (c)), are sometimes not given the full attention that they deserve. It is a statutory form, so your initial thought may be that you are not going to be able to do much customization. This would be unfortunate, as you have a golden opportunity to provide additional value to your clients by spending some time adding “bells and whistles” to transform the statutory form to a flexible, powerhouse tool.

I always like using the statutory form (as opposed to a completely custom power of attorney) as it is easily recognizable to financial institutions and others that may have to rely upon it. Luckily, the statutory form provides an easy mechanism to add additional powers (or clarification of powers that may seem implied by the blanket grant of powers at the beginning of the form) by use of the paragraph allowing for additions. (See paragraph 3 of the statutory form)

Utilizing additional powers may be crucial if you have a client that becomes incapacitated and then may need to do additional planning to apply for government benefits, prepare additional estate planning documents, react to estate tax changes, authorize distributions from qualified plans, take required minimum distributions, sign tax returns, access safe deposit boxes, and a host of other potential needs. I have compiled a general listing of items below that may merit some consideration in your powers of attorney. The list is not exhaustive, but rather meant to spark some ideas.

You may want to give agents under a power of attorney the power to:

Use, open, close or inquire about Credit Cards;
Obtain, open, read, respond to and redirect U.S. mail;
Deal with the Internal Revenue Service and local taxing agencies, including, but not limited to, signing returns, signing the IRS Power of Attorney Form, receiving and depositing refund checks, etc.;
Handle all business activities;
Enter into business succession agreements;
Specify more detailed real estate powers;
Enter into reverse mortgages;
Enter into Caregiver Agreements;
Create inter vivos trusts;
Fund existing trusts;
Establish Special Needs Trusts (OBRA or Pooled Trusts)
Apply for Government benefits, including Medicaid and VA benefits;
Purchase insurance contracts and annuities;
Explicitly provide for gifting (for both estate/gift tax planning and long term care planning)
Hire agents, attorneys, accountants, financial advisors; and compensate them;
Appoint ancillary agents;
Change domicile;
Access Safe Deposit Boxes;
Establish, contribute to, convert and roll over retirement plans;
Renounce and Disclaim.

The above list is just a starting point. Of course, your client’s individual situation may dictate further additional powers or limitations. I always operate under the presumption that it is better for the agent to have the powers necessary to act in the best interest of the principal. To the extent a particular power is not specified, it may not be allowed. That would be a lost opportunity.

Alan Press graduated from Georgetown University in Washington, D.C. where he received his B.S.B.A. While at Georgetown, he served as an intern for United States Senator Bill Bradley. In addition to being a lawyer, Alan is a Certified Public Accountant (CPA) with experience at Ernst & Young, one of the world's largest accounting and consulting firms. Alan received his law degree from Loyola University of Chicago and received the Am Jur Award in Federal Taxation. Alan is a member of the following organizations: Wealth Counsel, Elder Counsel, The National Academy of Elder Law Attorneys (NAELA), The Illinois State Bar Association (ISBA), the Lake County Bar Association (LCBA) and the American Institute of Certified Public Accountants (AICPA). In addition, Alan is the past Chair of the Committee on Legal Technology (CoLT) and a member of the Trust and Estate Section Council for the Illinois State Bar Association. Alan frequently contributes articles for the bar association and speaks at Continuing Legal Education (CLE) programs.

You can learn more about Mr. Press' practice on his website. His email address is: alan@alanpress.com .