Changing a life insurance beneficiary is one of the most consequential actions that can be taken with a policy. It determines who receives the payout after death and can completely alter an estate plan. When someone holds power of attorney over the policyholder, families often assume that authority includes the ability to change beneficiaries. In most cases, that assumption is wrong.
As a general rule, a person acting under a power of attorney cannot change a life insurance beneficiary unless the power of attorney document expressly and specifically grants that authority. Even when such language exists, beneficiary changes made under a POA are frequently challenged and often overturned, especially when the change benefits the agent personally or occurs near the end of the policyholder’s life.
Our life insurance attorneys regularly litigate these disputes and have successfully invalidated many beneficiary changes made under questionable POA authority. When you are facing a beneficiary dispute, we are here for you. Look at our beneficiary dispute fact sheet for more information.
The General Rule Courts Apply
Courts across the country treat beneficiary designations differently from ordinary financial transactions. Because a beneficiary change alters who receives property at death, judges view it as a quasi estate planning act, not just routine asset management.
For that reason, broad language granting authority over “financial matters,” “insurance,” or “personal affairs” is usually not enough. To validly change a life insurance beneficiary, the power of attorney must contain clear, explicit language authorizing the agent to alter beneficiary designations.
If the POA does not contain that specific authority, the change is typically invalid and the prior beneficiary designation controls.
Why Courts Scrutinize POA-Based Beneficiary Changes
Beneficiary changes made under a power of attorney raise immediate red flags, particularly when the agent benefits from the change. Courts are deeply concerned about abuse of authority and conflicts of interest.
Common reasons these changes are challenged include:
• The POA lacks express beneficiary change authority
• The policyholder lacked mental capacity at the time of the change
• The agent exerted undue influence or coercion
• The agent named themselves or a close associate as beneficiary
• The change contradicts long standing estate planning decisions
• The change occurred shortly before death
When these factors are present, courts often invalidate the change and restore the original beneficiary.
Types of Power of Attorney and What They Do Not Allow
Understanding the type of POA involved is critical, but none of them automatically allow beneficiary changes.
General Power of Attorney
Grants broad authority over finances but does not survive incapacity. It does not allow beneficiary changes unless explicitly stated.
Durable Power of Attorney
Remains effective after incapacity, but durability does not expand authority. Specific language is still required to change beneficiaries.
Limited or Special Power of Attorney
Authorizes only listed acts. If beneficiary changes are not listed, the agent has no authority to make them.
Springing Power of Attorney
Takes effect upon incapacity. Even then, authority is limited to what is expressly stated in the document.
Medical Power of Attorney
Applies only to healthcare decisions and has no authority over life insurance or financial matters.
Self Dealing Is Especially Vulnerable to Reversal
When a POA agent changes a beneficiary designation in their own favor, courts apply heightened scrutiny. Agents owe a fiduciary duty to act solely in the policyholder’s best interests. Self enrichment is often treated as a breach of that duty.
Even if the POA contains language authorizing beneficiary changes, courts may still invalidate the change if it appears the agent acted for personal gain rather than carrying out the policyholder’s intent.
In many cases, the timing of the change and the lack of corroborating evidence of intent are enough to undo it.
What Happens If the Insurer Accepts the Change?
Insurance companies often accept beneficiary change forms at face value without analyzing POA authority. That acceptance does not make the change legally valid.
If a payout has not yet occurred, the insurer may file an interpleader lawsuit and let the court decide who is entitled to the funds. If the payout has already been made, courts can still order the improperly paid beneficiary to return the proceeds.
Insurer approval does not override state law or fiduciary principles.
Evidence Used to Challenge Improper POA Changes
To contest a beneficiary change made under a power of attorney, we typically gather:
• The original and revised beneficiary designations
• The complete power of attorney document
• Medical records showing cognitive impairment or incapacity
• Evidence of the policyholder’s prior estate planning intent
• Financial records showing who benefitted from the change
• Witness testimony regarding pressure or coercion
These cases are fact intensive, but courts are receptive when the evidence shows overreach or abuse of authority.
What Happens After the Policyholder’s Death
All authority under a power of attorney ends immediately upon death. Any beneficiary change attempted after death is void as a matter of law.
Only the beneficiary designation in effect at the moment of death controls, subject to court review if the change itself is challenged.
Key Takeaway
A power of attorney does not automatically allow someone to change a life insurance beneficiary. Without explicit authority, the change is usually invalid. Even with explicit authority, courts frequently reverse changes that involve self dealing, lack of capacity, or undue influence.
If you were removed as a beneficiary by someone acting under a power of attorney, or if you are facing a dispute involving a POA based change, the outcome is far from settled. These cases are often winnable with the right legal strategy.