Death and Taxes Blog

HB6477, which would amend the Illinois Power of Attorney Act, has now passed both houses of the Illinois legislature. If I remember anything from civics, it now goes to the governor for signing into law. Here is the full text (it has an effective date of 7/1/11).

To hit a few of the high points of the bill -- it:

1. defines "incapacitated" as well as "incurable or irreversible condition," "permanent unconsciousness" and "terminal condition";

2. details how agents under powers of attorney have to keep records;

3. establishes a procedure for the agent to certify that he or she has accepted the position of agent;

4. expands on the mechanism for court review of a power of attorney;

5. discusses successor agents and co-agents in more depth. (Note that HB6477 is consistent with current law in not allowing co-agents under the statutory forms for powers of attorney for health care and property);

6. addresses the validity of powers of attorney executed in another state; and

7. adds provisions allowing for an agent under a health care power of attorney to dispose of remains

This document, prepared by Illinois Right to Life, was provided to me recently. They consider it a "life-affirming version of the Durable Power of Attorney for Health Care," and indicate that it is a response to "the current medical and legal climate that actively promotes euthanasia and assisted suicide for the disabled and terminally ill." That's surprising, since the document:

1. allows for termination of life AND

2. actually can allow for termination of life in many more cases than the Illinois statutory short form power of attorney.

For one thing, the document states that "I wish food and fluids provided to me either orally, intravenously, by tube, or by other means to the full extent necessary to both preserve my life and to prevent death by dehydration and/or starvation," but also grants an exception ("unless death is truly imminent from an underlying fatal disease, or unless I am unable to assimilate foods or fluids"). Note that the Illinois statutory form allows you to choose what type of life-sustaining treatment you wish to receive, including the following:

I want my life to be prolonged to the greatest extent possible without regard to my condition, the chances I have for recovery or the cost of the procedures.

Notice that there are no exceptions in that statement.

As an estate planning attorney, I tend to think of health directives as a very good thing. I was surprised to learn a few years ago that there are people who dislike powers of attorneys and living wills. For instance, in the wake of the Terri Schiavo case, I read an interview with Professor Robert George of Princeton (the interview is here) in which he objects to living wills. Here's a section of interest:

NRO: As you know, there's some question about what Terri Schiavo's wishes were or would be now. How much should turn on this question?

GEORGE: It is the wrong question. It is pointless to ask whether Terri Schiavo had somehow formed a conditional intention to have herself starved to death if eventually she found herself in a brain-damaged condition.... [I]t is a mistake to assume that people can make decisions in advance about whether to have themselves starved to death if they eventually find themselves disabled. That's why living wills have proven to be so often unreliable. One does not know how one will actually feel, or how one will feel about one's life and the prospect of death, or whether one will retain a desire to live despite a mental or physical disability, when one is not actually in that condition and when one is envisaging it from the perspective of more or less robust health.

Consider the case of a beautiful young woman — an actress or fashion model perhaps — who is severely burned in a fire. Prior to actually finding herself in such a condition, she might have supposed — and even said, if the subject had come up in a conversation — that she would rather be dead than live with her face grotesquely disfigured. But no one would be surprised if in the actual event she did not try to kill herself by starvation or some other means, and did not want to die.

It's an interesting point, I suppose, although I'm not sure what Professor George means by "unreliable." Have there been a number of people who executed living wills asking for no life-sustaining treatment, were then disabled, and were able to indicate that they did indeed wish to have the treatment? I don't think so. What Professor George really means is, "I want to keep you alive." Is that the state's right, to keep you alive no matter what? These philosophical questions are important, I think. Yet no one wants to discuss these questions, questions like:

-Is health care a human right? If so, are we then obligated to provide health care to every human being in the world?

-If the US provides health care (directly or indirectly) to all Americans, can there be any limits on that care? If I am 95 years old and a treatment costing $500,000 would keep me alive for an extra 3 months, am I entitled to such treatment? If such treatment is denied, is that the equivalent of a "death panel"?

In living will-related news, Will Wilkinson has an interesting take on this issue here.

I find it interesting that the health care debate has focused at least partially on the issue of living wills and powers of attorney. Unfortunately, that issue has been confused by politicians and others who have chosen to lie about language in the health care bill, claiming that it would create "death panels" to decide whether an individual would be allowed to continue living. Section 1233 of H.R. 3200, and its description of an "advance care planning consultation," is what's at issue. Here's what such a consultation is meant to include:

(A) An explanation by the practitioner of advance care planning, including key questions and considerations, important steps, and suggested people to talk to.

(B) An explanation by the practitioner of advance directives, including living wills and durable powers of attorney, and their uses.

(C) An explanation by the practitioner of the role and responsibilities of a health care proxy.

(D) The provision by the practitioner of a list of national and State-specific resources to assist consumers and their families with advance care planning, including the national toll-free hotline, the advance care planning clearinghouses, and State legal service organizations (including those funded through the Older Americans Act of 1965).

(E) An explanation by the practitioner of the continuum of end-of-life services and supports available, including palliative care and hospice, and benefits for such services and supports that are available under this title.

Gosh, I don't see anything requiring old people to submit to a death panel, do you? I do see some language about advance directives and health care proxies (AKA living wills and powers of attorney), though.

Evidently President Obama recently answered a question at an AARP meeting on the topic of living wills, and reported that he and his wife have them. (Here is a cite.) I also just saw a press release from the Better Business Bureau, mentioning the importance of a living will.

I suppose any publicity for estate planning is good publicity, but let me reiterate one of the earliest themes from this blog: powers of attorney >>>> living wills (at least in Illinois). A few previous posts on this subject:

Missing the Point of Living Wills

Powers of Attorney: The Best Solution?

Law Quadrangle Notes on Drafting Errors, Living Wills

Recently I posted (here) a summary of a recent Illinois Bar Journal article about potential problems with the Five Wishes directive. I almost immediately received an e-mail from someone affiliated with Five Wishes, saying "stay tuned for a rebuttal." The rebuttal has now been published in the Illinois Bar Journal -- I'm publishing it here as well (with permission):

May 18, 2009

Dear Editor:

We’re flattered that authors Koenig and Hyde (“Be Careful What You Wish For: Analyzing the Five Wishes Advance Directive,” IBJ May 2009) pored over our document, and as would a law student studying a model contract, found areas that might-could-maybe-potentially become a problem. While we can all be grateful for detail-oriented attorneys, their article falsely suggests Illinois residents’ health care decisions won’t be honored if not written on the state form.

Acknowledging the legal intricacies of advance care planning, in 1997 we consulted with the American Bar Association’s Commission on Law and Aging in developing the national version of Five Wishes. Some 13 million copies of Five Wishes later, there have been zero cases of litigation in Illinois or elsewhere. Indeed, Illinois ranks among the top five states where Five Wishes is distributed. What few complaints we receive about Five Wishes generally come from people in non-Five Wishes states (currently fewer than 10) who don’t understand why they must use government words and forms to express their own personal wishes.

Even in the states that still have statutorily required language, mandatory warnings and forms, some people have pointed out that state advance directive laws are intended to complement and enhance fundamental constitutional and common law principles that affirm patient autonomy and that any authentic expression of a patient's wishes should be respected. Nevertheless, in the non-Five Wishes states, we have taken the more conservative position and advise people to complete Five Wishes and attach it to their completed state form. It would be unfortunate for Illinoisans if they were now told to add that cumbersome layer of formality to what is now a simple and understandable process, both for the public and health care providers.

Five Wishes is immensely popular precisely because it is easy to understand and use and is written in clear, everyday language (23 languages). Five Wishes, unlike state forms, addresses personal, family, spiritual, dignity and comfort issues, which are the things people say would matter most to them if they were seriously ill or near death. Five Wishes has thus helped shift the focus to what the patient wants or doesn’t want so that his comfort and dignity are honored. We’re proud of the many Illinois health care providers, employers, businesses, places of worship and attorneys that are among our 15,000 partner organizations nationwide and that are themselves part of a larger engine driving change in America. For our part, we continue to consult with the ABA Commission on Law and Aging to keep current on all legal matters related to advance care planning.

Koenig and Hyde conclude that because Five Wishes is popular, lawyers and the General Assembly should go back and make the Illinois state form more user-friendly, sort of like trying to build a rounder wheel. A more sensible option would be to simply affirm patient rights and honor their wishes, not to perpetuate the notion that their decisions will not be honored unless the words they use are endorsed by the Illinois General Assembly.

Sincerely,

Paul Malley

President, Aging with Dignity

Aging with Dignity is a national non-profit organization

Here's my take on the letter:

I'm not crazy about the snotty tone. Mr. Malley isn't "flattered" by the authors of the article poring over the Five Wishes directive; rather, he's ticked off that the authors are pointing out what they see as flaws in the document. As a result, he belittles their efforts.

Does Mr. Malley belittle their efforts because he thinks their conclusions are incorrect? I have no idea. Mr. Malley is not interested in debating the merits of the conclusions, and I can't tell from his letter whether he understands or has even read these conclusions. Instead, he is interested in PR -- there are appeals to authority ("we worked with the ABA on this!"), and platitudes about how everyone has a right to express their wishes.

You could, I suppose, read the original IBJ article as criticizing the Five Wishes document or its creators, although I doubt that was the intention of the authors. Or you could think carefully about what the article says, and consider whether the points it raised are valid. Is Aging With Dignity trying to make a better document? From this letter, it sure doesn't seem like it.

We all crave simplicity, don't we? I know I do, and I know I sometimes get frustrated when things seem complicated just for the sake of being complicated. But I also recognize that, sometimes, things are complicated because that's the way life is.

The Five Wishes advance directive is an attempt to simplify matters, by allowing a person to dictate "how you want to be treated if you get seriously ill and unable to speak for yourself." It's a do-it-yourself document, one not written in legalese. But, as Ray J. Koenig III and MacKenzie Hyde make clear in their article in this month's Illinois Bar Journal (to be found here), users of the Five Wishes need to be careful what they wish for.

Some of the problems addressed in the article:

-Five Wishes creates ambiguity, as it doesn't define important terms like "health care professional"

-Five Wishes blurs the line between an agent under a health care power of attorney and an agent under a property power of attorney. Five Wishes allows you to delegate some property-related activities to your (health care) agent.

-Five Wishes allows a principal to essentially name a doctor as his or her agent, which is contrary to Illinois law.

-Five Wishes is ambiguous regarding when the agent takes over in the decision-making process.

The authors make it clear that Five Wishes has some value as a tool to stimulate dialogue about hard-to-discuss issues, but there are obviously some very major concerns about whether Five Wishes should be used in addition to or in place of Illinois powers of attorney.

Last Friday I handled a real estate deal -- my client (an estate) sold the decedent's house. The administrator lives out of state and couldn't attend, so I (at the administrator's request) prepared a power of attorney in favor of myself. This is typically done when one/both sellers can't be at the closing, but note that there's an additional wrinkle when a fiduciary is involved. The title company and I had to make sure that my duties as agent didn't amount to a my acting in the administrator's place AS administrator (making important estate decisions and the like). I drafted the power of attorney with specificity, allowing myself only the power to fulfill ministerial functions (really, just signing the closing docs). As a result, the POA was accepted by the title company, and the closing went off without a hitch. The only additional cost to the client was the $54 fee to record the POA (far cheaper than a plane ticket!).

My prediction is that, as more and more baby boomers become fiduciaries for their parents, we're going to get a lot more articles like the very good one by Helen W. Gunnarsson in last month's Illinois Bar Journal (available for members here).

Powers of attorney were created in response to a very real problem: if you are disabled, who can make decisions for you? The "old school" way to proceed was with a guardianship -- that's very expensive and very time-consuming. But there are also problems with powers of attorney, which give the agent acting under them a LOT of power. Also, there are a lot of gaps in the law, which the article mentions. For instance, we just don't know whether an agent under a health care power of attorney is eligible to receive compensation.

All of this creates a lot of uncertainty for individuals named as agents. The solution is to get your own representation, to negotiate the terms of the power of attorney and to explain the agen'ts duties, but that's rarely done. It seems to me that we are seeing an attempt to turn law into a commodity. "Why should I spend the money to do X?" when X is, in this case, the legal equivalent of preventive medicine. Of course, when things go wrong, costs and aggravation can skyrocket, and THEN people want to (or have to) bring in the lawyers.

Last week I was getting my teeth cleaned (no cavities -- yippee!). My dental hygienist has a college-age daughter, and one of her friends recently had a drinking "accident" (fell while drunk, and had to be hospitalized with a broken leg). Because this friend is 18 years old, his parents didn't find out about the hospitalization until their son told them (presumably he didn't want them to be surprised by the hospital bills).

This type of thing always surprises me. If I'm a parent and paying ridiculous sums to State U., shouldn't I have the right to know about my child's well-being? The law says no, but there's a way around the law: have your child sign a power of attorney for health care with one or both parents as agents, and make the power of attorney effective immediately. Then, furnish a copy of the power of attorney to the campus health center. Now -- presto! You have the right to find out about your child's health and well-being.

Yesterday a client called me with an issue that probably arises fairly often.

Client's husband's father lives in a foreign country, and is dying. Client and her husband will go and see him for a couple of weeks, but will leave their minor children at home with a relative.

The issue was, how do you allow this relative to handle medical emergencies that may arise with the minor children? There are a few options:

1. Power of attorney for health care. Section 4-3 of the Illinois Power of Attorney Act states that "[t]he health care powers that may be delegated to an agent include... all powers a parent may have to control or consent to health care for a minor child." Of course, the Illinois statutory form for power of attorney doesn't mention health care for minor children, so inserting specific language in the form may be necessary.

2. Short-term guardian appointment. Alternatively, section 11-5.4 of the Illinois Probate Act allows a parent to "appoint in writing, without court approval, a short‑term guardian of an unmarried minor or a child likely to be born. The written instrument appointing a short‑term guardian shall be dated and shall identify the appointing parent or guardian, the minor, and the person appointed to be the short‑term guardian." The written instrument has to be signed by the parent and at least two credible witnesses. The nice thing about this option is that you can set the actual term of guardianship (like, say, two weeks).

3. Contact your doctor or hospital and obtain a form from them. Here is a sample from Condell Hospital in Libertyville, Illinois.

Option #3 may be the best option -- you don't need to hire an attorney, and if you use your hospital's form, you know that it will be acceptable to them.

Thanks to members of the ISBA Transactional Law listserv who shared some of their ideas regarding this question.

Good article in this morning's Wall Street Journal entitled "How to Ensure Relatives Don't Rip You Off." It's available here (registration may be required).

People have a visceral reaction to things like probate and guardianships, assuming that they are a waste of time and money. A court process may take up time and money, but it also can provide protections that non-probate mechanisms can't. If you pick the wrong executor or guardian, the court will protect your interests and make sure this person is doing his or her job correctly. If you pick the wrong agent under your power of attorney, you may wake up and find that your estate has been looted, with very little ability to get your assets back. Ditto with picking the wrong trustee.

The solution is not to forego estate planning -- rather, the solution is to think very carefully about who should act as your fiduciary and, if necessary, to impose checks and balances on this person.

If you gave me a comb-over every time a government worker took advantage of an elderly person, I'd be Donald Trump. The latest case can be found here (you can skip CBS 2's slideshow on openly gay celebrities if you want). Karen Bailey is accused of forging a power of attorney to get access to the funds of a woman named Mary Ann Wilson. Some of the shocking details:

1. Ms. Bailey is "a top assistant to Cook County Commissioner Jerry 'The Iceman' Butler," singer of such R&B classics as "Only the Strong Survive."

2. "Bailey earns $64,000 a year and is well known within the County Building for her side business of selling sex toys." Huh?

3. Not so amusing -- Ms. Wilson "was discovered in her home, totally abandoned, in feces, confused, [unable] to walk or talk, and had lost a lot of weight."

The nice thing about powers of attorney -- which have become more prevalent in recent years -- is that they allow individuals you trust to handle your property without needing to go to court and obtain a guardianship. The downside is that there aren't many checks and balances on powers of attorney, so unscrupulous people can use them to take advantage pretty easily.

I previously blogged about litigation in the estate of Buddha-bellied Hall of Famer Kirby Puckett here.  According to this article, Mr. Puckett's ex-wife (Tonya Puckett) is now attempting to have the executor of Mr. Puckett's estate, Brian Woods, removed from his post.  Ms. Puckett claims that Mr. Woods "is no longer qualified to manage the estate because he has a 'significant and irreconcilable conflict of interest' stemming from his role in the money transfer and statements he made about taking care of Puckett's fiancee, Jodi Olson."

She alleged that Woods told her in the hours before Kirby Puckett died that Olson was not named in the will and that she needed to "be taken care of, and that $1 million to $1.5 million needed to be given to her."

...

The petition also alleges that on the day Puckett died, his longtime agent, Ron Shapiro, acting under a power of attorney, transferred money from Puckett's account to Olson's.

The petition said the "gift" was "a clear violation" of Arizona law. Woods "was effectively an accomplice," it said, because he was aware of the transfer and did nothing to stop it or, later, recover the money.

[Mrs. Puckett's attorney] said Tuesday that the transfer was made even though William Brody, a Minneapolis attorney representing Woods, advised Shapiro before the transfer that such a transaction was not authorized by the power of attorney agreement.

The question of whether an agent under a power of attorney can make gifts on behalf of the principal -- either directly or by changing the principal's estate plan -- has always been an important one. 

In Illinois, the statutory form for a power of attorney for property includes a long list of powers granted to the agent, but doesn't include the power to make gifts.  I typically include such a power if my client wants it. 

The above article mentions Arizona law -- I assume that Mr. Puckett executed an Arizona power of attorney for property.  However, it doesn't appear to me that Arizona has a statutory form for this document, so the question of whether the gift was a "clear violation" of Arizona law depends on the specific language of the power of attorney Mr. Puckett executed.   

Thanks to the magic of Vicodin, I seem to be recovering fine from yesterday's surgery -- thanks to everyone who wished me well.  With any luck, my "hyena" should be better in no time.

This was the first opportunity I've had to submit the health care power of attorney I drafted for myself a couple of years ago.  I mentioned this fact to my nurse, and she told me, "Gosh, I really need to get one of those."  Talk about the cobbler having no shoes! 

The title of the article (courtesy of Sploid) says it all:

"Granny Gets DNR tattoo on her chest"

I agree with Bob Cowie, chairman of the Iowa Bar Association's probate and trust law section, who is quoted as saying that "[t]here are easier ways to do it than that," such as signing a living will or authorizing a medical power of attorney.

This month's Illinois Bar Journal has an interesting discussion of the recent 4th district case entitled In re Estate of Doyle (the discussion is available to members of the Illinois State Bar Association here).

The Doyle case involved a power of attorney for property executed by Mary Doyle in favor of her daughter, Rose Marie Doyle, in 1998.  Mrs. Doyle then tried to revoke the power of attorney.  In 2004, Mrs. Doyle's son and son-in-law sought a guardianship for Mrs. Doyle, which was eventually granted (apparently because the court found that Mrs. Doyle's daughter had abused her position as agent under the power of attorney).  The question before the court was this: was Mrs. Doyle's revocation of the power of attorney effective, even though Mrs. Doyle may have executed such revocation when she was incompetent?

The case generated three opinions:

The majority ignored the question of Mrs. Doyle's attempted revocation, finding instead that the court had "implicitly revoked" the power of attorney under a provision in the Power of Attorney Act (755 ILCS 45/2-10) allowing an agent to be removed for cause.

The concurring opinion agreed with that result, but said that an incompetent person can't revoke a power of attorney.

The dissent agreed that an incompetent person can't revoke a property power of attorney (noting that revocation of a health care power of attorney by an incompetent person is specifically allowed under the statute).  But the dissent went on to say that a power of attorney is not implicitly revoked through a guardianship proceeding -- instead, you have to specifically use the procedure set forth in §2-10.

The majority's opinion has evidently been somewhat controversial among practitioners, since it appears to weaken the effect of §2-10.

Q: Do I need to attend my real estate closing?

A: That depends on whether you are buying or selling the real estate.

If you are a seller, you don't need to attend if (1) you execute a power of attorney for property, and (2) your agent under that power is present at the closing and signs all of the sale documents (deed, bill of sale, etc.) on your behalf.  It's fairly common for married couples to use a power of attorney for this purpose, with one spouse attending the closing and signing documents for both spouses, and the other spouse dealing with the movers or watching the kids.  In addition, it's somewhat common for sellers (whether married or single) to avoid the closing altogether, by appointing their attorney as their agent. 

While powers of attorney work fine, I usually like to have sellers who don't plan to attend the closing sign all of the sale documents in advance.  That way, the sellers will be able to avoid having to record their power of attorney with the county recorder's office (saving a recording fee of perhaps $50).  The power of attorney will still be necessary to sign ancillary documents at closing (such as the settlement statement), but shouldn't need to be recorded.

If you are a buyer, you will need to check with your lender, to see if you can (1) have the loan documents signed by an agent under a power of attorney or (2) sign the loan documents prior to closing.  If your lender says no to both of these requests, you'll have to attend the closing (or find another lender).

This month's Illinois Bar Journal features an article by Helen W. Gunnarsson entitled "Help Your Client Choose the Right Advance Directive" (the link is here).  Much of the article covers issues I've already discussed here -- how powers of attorney for health care are more flexible than living wills, the importance of making your wishes known, and the danger of abuse by an unscrupulous agent.  But there are some helpful points in the "sidebars" at the end of the article, where Ms. Gunnarsson discusses advance directive resources as well as the Health Care Surrogate Act (the "Act").  The Act has been referred to as "the procrastinator's health care power of attorney," and allows health care decision making to take place without the need for a guardianship proceeding. 

Guardianship is to disabled people and minors what probate is to decedents -- the court is overseeing the administration of the property of someone who can't do it for himself or herself. (In addition, because the disabled person or minor is still alive and may be vulnerable, the court needs to concern itself with the disabled person or minor's care.)  But, while I've talked about how probate isn't all that time-consuming or expensive, the same isn't true for guardianship -- it's a royal pain in the neck.  Given this fact, it might be a good idea to review guardianship substitutes. 

I would first note that there are really two types of guardians:

(1) the guardian of the estate, who deals with the property of the disabled person (aka "the ward"); and

(2) the guardian of the person, who handles the ward's living arrangements, care, etc.

Substitutes for Guardian of the Estate

• If a person established and transferred his or her property to a living trust prior to disability and the trust document allows it (which it should), the trustee can administer the property for the person's benefit.  That includes making distributions to or for the benefit of the person.  (Usually the creator of a living trust will be the trustee of the trust when it's created, but the trust document should provide an easy mechanism for the trustee's removal in the case of the trustee's disability.)
• If a person executed a property power of attorney prior to disability, the agent can use it to manage the person's property for the person's benefit.  Setting up a living trust but failing to transfer property to it is a common estate planning error; as a result, I always include a provision in my property power of attorney documents allowing the agent to begin or finish the transfer of property to any living trust previously established by the person.

Substitutes for Guardian of the Person

• If a person executed a health care power of attorney prior to disability, the agent can make health care decisions for the person. 
• The Health Care Surrogate Act can be used if a person didn't execute a health care power of attorney prior to disability.  Of course, as with many other issues, the drafters of the Act make certain assumptions about who the person would have wanted to make health care decisions on his or her behalf -- these assumptions may not reflect the wishes of any particular individual.

Question: When I die, I would like to be cremated.  Should this request be inserted into my Will, or into another legal document?

Answer: I wouldn't recommend putting burial instructions in a Will.  Many people keep their Will in a safety deposit box or safe, thereby making it difficult to obtain at a moment's notice.  I know from experience that there's nothing worse than looking for a decedent's (temporarily missing) Will, trying to find burial instructions because funeral arrangement must be made a.s.a.p.

I would recommend putting your burial instructions in your health care power of attorney.  While a power of attorney is mostly concerned with issues arising during your life -- you use it primarily to appoint an agent to make health care decisions for you if you are unable to do so -- the health care power of attorney statute specifically grants an agent certain powers after the principal's death:

The agent is authorized: to direct that an autopsy be made... ; to make a disposition of any part or all of the principal's body pursuant to the Illinois Anatomical Gift Act, as now or hereafter amended; and to direct the disposition of the principal's remains.

(That comes from 755 ILCS 45/4-10(b)(5)). The burial instructions are most appropriately inserted in paragraph 2 of the Illinois Statutory Short Form Power of Attorney.  So that your agent can carry out your wishes, you'll also want to make sure that you do not indicate a termination date (such as death) for the power of attorney.