Page 1 - John Hundley 2012

New Developments Update

Sharp Thinking

No. 56 Perspectives on Developments in the Law from The Sharp Law Firm, P.C. January 2012

Broad Effect of Property POAs Called Into Question

The effect of broad authority-granting clauses in
powers of attorney (“POAs”) for property has been Special Update Issue
called into question by a recent decision of the Recognizing that the law is not static and that no
Illinois Appellate Court. analysis can stop further development, Sharp Thinking
from time to time publishes update issues discussing
As discussed in Sharp Thinking No. 45 (April new developments in areas already covered – develop-
2011), such documents often follow statutory ments which individually do not justify another issue on
language which appears to grant broad authority in the topic, but of which we want to make you aware.
an area, followed by reference to a long list of This issue provides such updates on several topics.
specific authorities within the broad area, the If a topic is of interest and you do not have the
specifics appearing to be illustrative rather than all- original issue to consult for reference, please check it
inclusive. Moreover, as noted in the previous issue, out on our website, www.thesharpfirm.com, or request it
by e-mailing Brenda@lotsharp.com.
effective July 1, 2011, the statutory form merely
made reference to the broad classification and, by that reference, the long list of specifics was deemed to
be incorporated into the POA.

Enter In re Estate of Nicholls, 2011 IL App (4th) 100871 (Sept. 29, 2011), where the agent attempted
to use the broad powers granted under a POA to authorize the agent to change the beneficiaries on the
principal’s certificates of deposit. Noting that the POA at issue was similar to but not exactly in the
statutory form, the 4th District refused to base its decision on the POA’s variance from the statute. The
court held that the list of specific powers granted within the broad statutory classifications did not
operate to confer powers not specifically listed. Because the power to change beneficiaries was not
specifically granted, the court said it could not be inferred from the general grant of the banking powers
clause. The court so ruled notwithstanding a provision that the enumeration of specific items was not
intended to limit or restrict the general durable power granted therein.

There is an old saying that hard cases make bad law. This may be one of them, as the court noted
in passing that the agent “appears to have engaged in self-dealing, thereby depriving the estate of several
hundred thousand dollars”.

Another Court Sustains Bank’s Use of 365/360 Interest Scheme

Judicial support for banks’ use of the 365/360 interest-calculation scheme has spread to the federal
system. Citing with approval the cases discussed in Sharp Thinking Nos. 43 (March 2011) and 51
(August 2011), the U.S. Court of Appeals for the 8th Circuit, applying Illinois law, found the 365/360
method to have been adequately disclosed and to not be improper. Kreisler & Kreisler, LLC v. National
City Bank, 657 F.3d 729 (8th Cir. 2011).

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Sharp Thinking is an occasional newsletter of The Sharp Law Firm, P.C. addressing developments in the law which may be of interest. Nothing contained in Sharp
Thinking shall be construed to create an attorney-client relation where none previously has existed, nor with respect to any particular matter. The perspectives herein
constitute educational material on general legal topics and are not legal advice applicable to any particular situation. To establish an attorney-client relation or to obtain legal
advice on your particular situation, contact a Sharp lawyer at the phone number or one of the addresses provided on page 2 of this newsletter.