Can You Challenge a Life Insurance Beneficiary Change Made by a Power of Attorney (POA)?

Life insurance beneficiary designations are typically straightforward, allowing policyholders to name individuals who will receive the proceeds upon their death. However, complications can arise when a power of attorney (POA) is involved, and the agent under the POA changes the beneficiary designation on behalf of the policyholder. This raises important legal questions, especially when family members or other beneficiaries suspect the change was not in line with the policyholder’s true intentions.

In this blog, we will explore whether you can challenge a life insurance beneficiary change made by a POA, the legal standards involved, and specific considerations under Florida law, including the requirement for “superpowers” within the POA document. You could force a life insurance interpleader lawsuit and stop the benefits from being paid out without a lawsuit if the POA failed to change the beneficiary properly. If you suspect there was an improper beneficiary change, contact our Florida life insurance lawyers at the Law Offices of Jason Turchin at 800-337-7755 today for a free consultation.

What is a Power of Attorney?

A power of attorney is a legal document that allows an individual (the principal) to appoint someone else (the agent or attorney-in-fact) to make decisions on their behalf. These decisions can include managing finances, real estate transactions, and even making changes to life insurance policies, depending on the powers granted in the POA document.

However, the scope of authority given to the agent varies, and not all POAs automatically allow the agent to make changes to life insurance beneficiary designations.

Can a POA Change Life Insurance Beneficiaries?

Whether a POA can legally change a life insurance beneficiary depends on the specific terms of the POA document and the laws governing POAs in the relevant jurisdiction. In general:

1. Specific Authority Required: To make changes to a life insurance beneficiary designation, the POA document must generally explicitly grant the agent the power to do so. This is often referred to as a “superpower,” as it is not an inherent right of the agent under a standard POA. Without this specific grant of authority, the agent does not typically have the legal right to change the beneficiary.
2. Fiduciary Duty: Even when the POA grants the agent the authority to change beneficiaries, the agent has a fiduciary duty to act in the best interests of the principal. If the beneficiary change appears to benefit the agent personally or does not align with the principal’s known wishes, the change can be challenged in court.
3. Capacity and Intent: If the principal lacked the mental capacity to understand the changes being made or if the agent acted under duress or coercion, the change can be challenged.

Challenging a Life Insurance Beneficiary Change Made by a POA

If you suspect that a life insurance beneficiary change made by an agent under a POA was improper, you may have grounds to challenge it. Here are some common reasons to challenge such a change:

• Lack of Authority: The POA document did not explicitly grant the agent the power to change beneficiaries.
• Breach of Fiduciary Duty: The agent acted in their own interest rather than in the best interest of the principal.
• Incapacity: The principal lacked the mental capacity to understand the changes.
• Undue Influence or Fraud: The agent manipulated or coerced the principal into making the change, or the change was made without the principal’s knowledge.

Florida Law: “Superpowers” in a POA to Change Beneficiaries

In Florida, a POA must contain specific language granting the agent the authority to change life insurance beneficiaries. These are often referred to as superpowers, and they are not automatically included in a standard POA document. Under Florida Statutes Section 709.2202, the following applies:

• Explicit Authority Required: The power to change a beneficiary on a life insurance policy is not implied in a general POA. The POA must explicitly authorize the agent to make changes to the beneficiary designations. If the POA does not grant this authority, any changes made by the agent can be challenged and potentially reversed.
• Execution Requirements: In addition to granting specific powers, Florida law requires that the POA document must be signed by the principal with certain formalities, including witnesses and notarization. Any deviation from these requirements can also provide grounds to challenge a beneficiary change.

Example:

Consider a scenario where a Florida resident names their spouse as the beneficiary of their life insurance policy but later becomes incapacitated. If the agent under the POA changes the beneficiary to themselves, and the POA document does not specifically grant this power, the spouse (or other beneficiaries) may challenge the change in court. The challenge could argue that the agent did not have the required authority to make the change and that the change violates the agent’s fiduciary duty to act in the best interest of the principal.

How to Challenge a Beneficiary Change in Florida

Challenging a life insurance beneficiary change made by a POA requires legal action, typically through probate court. Here’s how you can challenge such a change:

1. Review the POA Document: Examine the POA to determine whether it grants the agent the specific authority (superpower) to change life insurance beneficiaries. If it does not, you may have strong grounds to challenge the change.
2. Fiduciary Duty: Investigate whether the agent acted in the principal’s best interests. If the agent stood to benefit from the change or acted against the principal’s known wishes, you can argue that they breached their fiduciary duty.
3. File a Lawsuit: To challenge the beneficiary change, you will need to file a lawsuit in probate court. The court will review the evidence and determine whether the change was valid. If successful, the court may reverse the change and reinstate the original beneficiary designation.

Conclusion

Challenging a life insurance beneficiary change made by an agent under a POA is possible, especially if the agent lacked explicit authority or violated their fiduciary duty. In Florida, the POA must grant specific powers (superpowers) for the agent to legally change a life insurance beneficiary. Without these powers, the beneficiary change can be contested and potentially overturned.

If you believe that a life insurance beneficiary change was made improperly, it’s important to consult with an experienced life insurance attorney. At the Law Offices of Jason Turchin, we have extensive experience handling life insurance disputes and can help you protect your rights. Contact us at 800-337-7755 for a free consultation.

Let us help you challenge a life insurance beneficiary change and ensure that the policy is honored according to the law and the principal’s true intentions.