In August 2005, Martin Stahling Sr. signed a statutory “short form” power of attorney for health care decisions under Section 4-10 of the Illinois Powers of Attorney for Health Care Law. He designated his son, Martin Stahling Jr. The subject of the controversy was the transfer by Stahling Sr. to a deed of acres of land to himself and Stahling Jr. as joint tenants.
Stahling Sr. died in November 2007m bringing rise to the claim by his daughter, Martie Koehler, who maintained that (1) Stahler Jr. owed a fiduciary duty to his father and (2) there was a presumption that Stahling Jr. obtained the real estate by undue influence.
The question of law was certified by a Jersey County, Illinois, judge for immediate appeal to the Illinois Appellate Court.
The issue to be decided by the appellate court was, “Whether the existence of a Health-Care Power of Attorney creates a fiduciary relationship which, as a matter of law, raises a presumption of undue influence in the execution of a deed that names the agent under that health care power of attorney as a joint tenant in the deed.”
The Fourth District Illinois Appellate Court answered the question above in the negative. The court stated that, “To create a fiduciary relationship, an agent must accept the powers delegated by the principal. The execution of a statutory short form power of attorney, alone and without evidence of acceptance by the named agent, is insufficient to create a fiduciary duty between the principal and the agent.”
Koehler argued that the principal-agent relationship stems from a health care power of attorney and gives rise to a presumption of undue influence in any transaction between the principal and the agent. There is no Illinois case law that supports that proposition. Furthermore, it was argued that even if there were a fiduciary relationship established by the health care power of attorney, that relationship was extended only to health care matters within the scope of the power.
The court stated that generally, a presumption of fraud or due influence exists where there is a fiduciary relationship between the parties and the fiduciary has benefited by that status. A confidential or fiduciary relationship exists in all cases where trust and confidence are delegated to another person.
Fiduciary relationships are established either by law or by fact. Fiduciary relationships exist as a matter of law between partners, joint venturers, trustee and beneficiary, guardian and ward, attorney and client, principal and agent. Carroll v. Caldwell, 12 Ill.2d 487 (1957).
The court noted that although “the statutory short-form power of attorney for healthcare . . . authorizes the agent to make any and all health-care decisions on behalf of the principal which the principal could make if present and under no disability,” the named agent is under no duty to exercise grant of powers or to assume control of or responsibility for the principal’s healthcare. 755 ILCS 45/4-10(b).
The face of the health care power of attorney does not require the agent’s signature to create the fiduciary relationship; the agent must accept the powers delegated by the principal.
In this case, Stahling Jr. maintained that he was not aware that Stahling Sr. had executed the statutory short-form. The record also showed that Stahling Jr. never exercised any authority under the health care power of attorney. Because there was no acceptance of the agency relationship, there was no fiduciary relationship.
In conclusion, even if the health care power of attorney created a fiduciary relationship, the scope is limited to matters of the principal’s health care and not transactions involving property or financial matters not covered by the short-form.
Estate of Stahling, 2013 IL App. 120271 (April 3, 2013).
Kreisman Law Offices has been handling probate and estate litigation matters for individuals and families for more than 37 years in and around Chicago, Cook County and its surrounding areas, including Des Plaines, Forest Park, Chicago (Little Italy), Bridgeview, Hickory Hills, Blue Island, Chicago (Pullman), Darien, Willowbrook and Wheaton, Ill.
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