Olson Law’s Attorney Letter
The Olson Law Firm, LLC Olsonlawfirm.net Summer 2007, Vol. I, No. 2 Powers of Attorney: The good, bad, and the ugly
_____________________________________________________________________________________________ One thing that everyone needs is an advance directive. Not everyone needs a will, but no one should fail to plan for a loss of decisional (mental) capacity, whether temporary or permanent. Since their introduction in late 1987, the statutory short form powers of attorney for property and health care have spared many people guardianship. While the above is true, powers of attorney have also been called “licenses to steal” whereby unsuspecting elderly individuals have faced severe financial abuse. What are the appropriate procedures in educating your agent? What safeguards exist to protect a principal? What can be done if abuse is suspected? For starters, let’s be clear as to what powers of attorney aim to accomplish. A power of attorney (P.O.A.) allows a person (principal) to appoint another person (agent) to transact her financial and healthrelated affairs in her place. Importantly, a power of attorney is a pre-death legal document; with the exception of some disposition of bodily remains functions, agents acting pursuant to powers of attorney have no post-death authority. Illinois has created statutory powers of attorney for health-care and property. When a person turns 18 she can execute a power of attorney. For the health-care P.O.A. in particular, it is important to point out advance directives aren't for the elderly only. But while it can never be too early, it can be too late for a property or health-care P.O.A.; the point when decisional capacity is already gone. On their face, the statutory powers are effective when executed. However, it may be made effective on a future date or on the happening of a stated event. This event could be the incompetency of the principal. An adjudication of incompetency would be an easily ascertainable event. A written certification by a physician is also often appropriate because it requires the agent to secure an additional document signed by a presumably objective professional. The effective date of the power of attorney must be specifically understood by the principal.
A person of good repute who has the principal's best interest at heart and is assertive but not a controller makes the ideal agent. The best health-care agents are attuned to matters of personal care. The best P.O.A.for-property agents are good money managers. If the spouse has decisional capacity, he or she will probably be named the first agent in either advance directive. Competent, trusted adult children probably come next. Should the agent's power to act begin with the principal's signing of the power or should it be delayed until some event defined in the instrument occurs? Immediately effective powers, especially for the health-care P.O.A., are easier for the agent to exercise. Springing powers (future effective date) take effect when the person asked to rely upon them determines that the specified event has occurred. This ease of use by the agent can be both good and bad. Especially for a property P.O.A., many people are not comfortable giving agents immediate authority. Naming a full complement of back up or successor agents is important, especially for the health-care P.O.A., where the first named agent may not be readily available. If you have difficulty coming up with an agent for the property P.O.A., bank trust departments are sometimes willing to serve. How can a principal’s interests be protected from abuse? Providing some principal-protective oversight of the property agent is important if there is any question about the named agent’s intentions or ability. Requiring the agent to provide successor agents periodic financial accountings can provide oversight and help prepare the successors should they need to serve. How many copies of the P.O.A. should be executed? What should be done with them? The existence of multiple originals can make revocation difficult, and a provision of the Power of
Olson Law’s Attorney Letter – Olsonlawfirm.net
Attorney Act provides for reliance upon an authenticated copy, so that the principal or agent should never need to surrender the original. You can ensure availability of the property P.O.A. by recording it, though this is seldom done except in connection with real-estate transactions. If a recorded P.O.A. is revoked, the revocation must also be recorded in the same office and appropriately referenced. If the original is stowed in the principal's safe deposit box, the agent and successors should be informed of the location of the key and of a copy of the P.O.A. For health-care P.O.A.s, a copy should be offered to the principal’s primary care physician and to any specialists with whom he or she deals and to any health-care facilities where treatment is sought. Also, at least the first named agent should hold a copy of the health-care P.O.A. and know where the original is. A safe deposit box may not be the best place for the original, since it would not always be accessible. If you spend considerable time in another jurisdiction or go out of state for health care, you should consider executing an advance directive specific for the jurisdiction in question. Short of that, you might expressly state in the Illinois P.O.A. that the principal, although an Illinois resident, wishes the power of attorney to be honored outside of Illinois just as it would be at home and grants those relying upon it all the immunity Illinois health-care providers would enjoy. Of course, if you actually establish a residence outside Illinois, both the property and health-care P.O.A.s should be reviewed in the new jurisdiction. What can be done if abuse is suspected? At a recent presentation, Judge James G. Riley of the Cook County Circuit Court, Probate Division (adult disabled persons), stated that his litigation caseload had quadrupled in the last couple of years, almost totally related to litigation concerning powers of attorney. In re: Estate of Mary Ann Wilson, an appeal from the Circuit Court of Cook County, decided May 18, 2007, exemplifies this sort of situation. Mary Ann Wilson was 86-years-old when she was found in her home totally abandoned, in feces, confused and unable to talk or walk, on May 3, 2006. On May 12, 2006, petitions were filed in court seeking to appoint Ms. Wilson’s cousin as both temporary and permanent guardian. A guardian ad litem (GAL) for Ms. Wilson was appointed who was ordered to investigate Ms. Wilson’s health and financial circumstances. On May 15, 2006 the GAL presented serious concerns to the court regarding Ms. Wilson’s physical and financial condition. The GAL also discovered that an agent pursuant to powers of attorney for property and healthcare had been acting since 2004. Evidence was presented showing that bank accounts containing over $180,000 had been withdrawn by the agent. Due to the deplorable circumstances under which Ms. Wilson had been discovered, as well as her financial, health and mental issues, the circuit court temporarily suspended the agent’s authority under the powers of attorney and appointed Ms. Wilson’s cousin as temporary guardian. Later in the proceedings the agent was ordered to file an accounting of her previous financial dealings in this matter; she failed to do so. The agent subsequently filed an emergency motion to vacate the circuit court’s order appointing Ms. Wilson’s cousin temporary guardian and to issue a temporary restraining order against the cousin from any further action concerning Wilson. The circuit court denied both of these filings and this was upheld on appeal. This case is fairly representative of how the courts have acted when agent abuse, under a power of attorney, has been revealed. Generally a temporary and permanent guardian will be appointed. The “agency” relationship created by the power of attorney may be terminated by a court on petition by any interested person, including the agent. The court must find that the principal lacks the mental capacity to control or revoke the agency. The court must also find that the agent is not acting for the benefit of the principal in accordance with the terms of the agency or that the agent’s action or inaction has caused or threatens to cause substantial harm to the principal’s person or property in a manner not authorized by the principal. Only in this event may the court terminate the agency or take other action for the “best interest” of the principal. Interestingly, the agent in the In re: Wilson case has subsequently been charged criminally for the looting of Ms. Wilson’s financial assets. Any interested person, including the agent, has the standing to seek court assistance in regard to the agency. An “interested person” means one who has or represents a significant interest that may be affected by the proceeding. This would seem broad enough to include family members when the principal is incompetent.
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Olson Law’s Attorney Letter – Olsonlawfirm.net
The agent is an interested party, so the agent could ask for an accounting, instructions, or an interpretation of the agency. An agent has a duty to keep records and report to the principal. Reports could be required and could be approved. The above is an overview of potential steps to take in a civil court setting if financial exploitation is suspected where a power of attorney is involved. If more urgent action is needed a better first step might be to call the Senior HelpLine of the Illinois Department on Aging at 800/252-8966. To report abuse or neglect of a resident living in a long-term care facility, such as a nursing home or an assisted living establishment, call the Nursing Home Hotline at the Illinois Department of Public Health at 800/252-4343.
Client question: When is it legal to terminate a tenant’s right to occupy property pursuant to a lease? Describe the procedures.
_____________________________________________________________________________________________ Let me say for starters that this is a surprisingly technical area of law and you’d be amazed at the many, many, scenarios that exist regarding lease termination. I will address the three most common situations that our firm deals with regularly: 1) failure to pay rent; 2) breach of a lease covenant(s); and, 3) terminating a month-to-month lease.
First, by far the most common situation that we deal with is where a tenant fails to pay rent as required by a written lease agreement. In order to terminate a tenancy for failure to pay rent, the landlord must serve a five-day notice on the tenant. The notice should be served either directly on the tenant, to a person 13-years-of-age or older at the leased premises, by certified mail, or by posting the notice at the premises, if the property is vacant. The notice must include the amount of rent owed by the tenant. The tenant has five days to get current in his rent or the landlord may file suit to terminate the tenancy and/or regain possession of the premises. Beware; if a landlord wants to remove a tenant from a property, the landlord cannot accept rental payments equal to the amount included in the five-day notice from the tenant, or the landlord risks nullifying the five-day notice. If the notice is nullified, a landlord cannot proceed with eviction. Second, when a tenant breaches a lease covenant (other than for failure to pay rent) a landlord may seek to retake possession of the property by serving a 10-day notice. Examples of this situation are tenant noise problems or tenants having people living at a property that isn’t allowed in the lease. Service procedures for the notice are the same as for the five-day notice. The difficulty with these cases is proof at trial. If a tenant is being extremely loud, for example, be sure that you have some other tenants who are prepared to testify regarding these facts at trial. Lastly, a 30-day notice is required in order to terminate a month-to-month lease. When does a month-to-month tenancy exist? Two situations are common: either there’s no written lease and a tenant is paying his rent for each month or there had been a written lease that expired and the tenant remained in the property following the lease’s expiration. The only difficulty we see with these consistently is with the timing of serving the 30-day notice. The best policy is to be conservative in waiting 30 days before filing suit to remove a tenant from a property. In other words, if you wanted to begin your eviction lawsuit by August 1st, you should serve your 30-day notice by roughly June 20th so that there’s no doubt that the tenant received the notice by July 1. Then clearly 30 days will have run prior to August 1 and if necessary you can file suit to evict at that time. Those are the most common types of notice to terminate tenancies. Illinois law also provides for a seven-day and 60-day notice but I have never personally seen them used. A seven-day notice is used to terminate a week-toweek tenancy and a 60-day notice is used to terminate a year-to-year tenancy. *Email your questions to Diane at dbloch@olsonlawfirm.net for future newsletter issues.* **DISCLAIMER: Actual resolution of legal issues depends upon many factors, including variations of facts and state laws. This newsletter is not intended to provide legal advice on specific subjects, but rather to provide insight into legal developments and issues. The reader should always consult with legal counsel before taking action on matters covered by this newsletter.
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Olson Law’s Attorney Letter – Olsonlawfirm.net
Case law update – July 2007
_____________________________________________________________________________________________ In re: Marriage of Paredes – February 16, 2007, First District. In this case the appellate court held that when a non-custodial parent made child support payments directly to the custodial parent and not to the clerk of the circuit court as had been ordered, the non-custodial parent did not get any credit for these payments. The mother (custodial parent) had specifically assigned her right to child support payments to the Illinois Department of Public Aid, up to the amount of the public assistance she had received. Thus the father still owed Public Aid the amount that it was owed and he would have to seek reimbursement from the wife. How might this apply to you? Be careful! This case involved an often confusing situation. When a custodial parent receives public assistance, that parent often will be required to sign over his or her child support rights to Public Aid. Thus, any future child support payments must go to Public Aid and not the custodial parent. Do this right or you’ll end up with the difficult task of seeking reimbursement from the custodial parent which is never easy (and rarely successful). In re: Marriage of Matchen – April 11, 2007, Second District. The appellate court affirmed the trial court’s ruling which denied a petition for removal by the joint custodian mother. Here there were two children, ages 12 and 14, and the mother wanted to re-locate to the Wisconsin Dells to live with her retired fiancé. The court said that a reasonable visitation schedule could not be maintained that would allow for the father’s same level of involvement with the children, the children did not want to move to Wisconsin, and the move was only a matter of preference on the part of the mother’s fiancé. How might this apply to you? “Removal” involves the relocating of children to another state in a postdissolution of marriage situation or parentage case. First, plan ahead on these. These are not simple cases and you need to be considering this type of action six months to one year before the time you’re actually planning on relocating. Second, if the non-custodial or non-residential parent is actively involved in the lives of children, removal petitions are an uphill battle. Sears v. Charwil Associates, March 8, 2007, First District. Here a trial court was correct when it found that a landlord had breached a clause in the lease agreement which required that the landlord insure and indemnify a retail tenant from any and all litigation arising from use of common areas of a mall by customers, tenants, and their employees. The landlord had purchased a general liability policy which excluded the use of automobiles. Because of the insurance exclusion, the tenant incurred an uninsured judgment against it by a pedestrian who was struck by an automobile being backed out of a service stall by an employee of tenant. How might this apply to you? The main lesson of this case is: read your lease and comply with its terms. The landlord here had an unambiguous requirement to provide insurance for the tenant and the landlord did not comply. Sort of an interesting side note in this case was that the tenant, Sears, Roebuck and Company, had provided the lease copy and the language regarding insurance. If you’re a tenant that’s a big business this is a good idea to consider. Like with most legal documents, the drafter of the document is going to draft it to his advantage. Use this leverage if you can! The Illinois Department of Health Care and Family Services v. Warner, August 2, 2006, Fourth District. When a father’s parental rights have been terminated, his obligation to pay child support ceased at that moment because there was no longer a parentchild relationship. The fact that there was no evidence that anyone had adopted or was seeking to adopt the children did not alter the cessation of his support obligation. How might this apply to you? Simply, if your parental rights have been terminated, child support is no longer appropriate. We get many calls where a parent’s parental rights have been terminated and yet child support is still being paid; stop it! This is typically just a procedural issue with an employer or the fact that typically two different courts are involved. Two (separate) steps: 1) terminate parental rights; 2) terminate child support obligation.
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Olson Law’s Attorney Letter – Olsonlawfirm.net
In re: Marriage of Thornton – April 17, 2007, Third District. The trial court was wrong when it ordered that maintenance (alimony) was automatically terminated by virtue of a former wife allowing her former brotherin-law to reside in her home, with no evidence establishing the nature of their relationship. Although termination of maintenance may be effective as of the date of a former spouse’s continuing conjugal relationship, the spouse having the maintenance obligation may not unilaterally cease payment without filing a petition to terminate maintenance. How might this apply to you? This case deals with two important issues that impact people paying or receiving maintenance payments. First, bring a petition in court to terminate maintenance…don’t just stop paying voluntarily. Second, if you’re receiving maintenance, be careful who you start living with or your maintenance may stop. By law maintenance stops if the recipient begins to reside with another person on a “resident, continuing conjugal basis.” In re: Marriage of Saputo – March 10, 2006, First District. A former wife may seek enforcement of a 38year-old child support judgment at any time without having to revive the judgment. This right was established by means of the amendment to the statute governing limitation on enforcement of judgments, which now expressly excludes child support judgments from its seven-year statute of limitations period for enforcement as well as the 20-year statute of limitation for reviving judgments. A child support order is never time-barred. Flynn v. Henkel – November 17, 2006, Second District. Trial court was correct when it awarded unsupervised visitation for three hours one Saturday per week, to paternal grandmother of three-year-old born out of wedlock. Court could infer harm to child from deprivation of a relationship with a grandparent who loved him and did not undermine the mother’s parenting. How might this apply to you? The bottom line on grandparent visitation cases is that the law is in a state of flux and each case must be weighed on its particular facts. There’s more than one grandparent visitation case before the Illinois Supreme Court currently.
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