Can a Power of Attorney Change Beneficiaries on Bank Accounts?

Can a Power of Attorney Change Beneficiaries on Bank Accounts?

Someone with power of attorney, also called an “agent,” might be allowed to change who gets money from a bank account.

But, the rules for this depend on the state.

They can only do it in certain situations.

If the person with power of attorney does things they’re not supposed to, like changing who gets the money, it could be seen as abusing their power.

In this article, discover the rules around changing bank account beneficiaries with a Power of Attorney.

Explore the circumstances and potential concerns regarding this authority.

An Image of a Power of Attorney
Can a Power of Attorney Change Beneficiaries on Bank Accounts? Photo Source (Freepik)

General or Limited Powers

When someone makes a financial power of attorney, they (called the “principal”) give someone else (called the “agent”) the power to do certain money-related things for them.

This power can allow the agent to do many things, such as buying or selling property, or it can restrict them to specific tasks like paying bills.

It depends on what the person wants to allow the agent to do.

Changing Beneficiary Designations

Some power of attorney papers can let a person (called the “agent”) change who gets money from things like life insurance, banks, and retirement plans.

But, the agent must use this power for the person’s benefit.

If the agent uses it for their gain by changing who gets the money, the original beneficiaries can sue them for doing something wrong.

Varying State Law

Because more people are using the power of attorney papers, some states now need specific words in them.

In Colorado, for example, the paper must clearly say the person can change who gets money.

If not, they can’t do it.

If someone thinks the person with power of attorney is doing something wrong, they can complain to the court.

Automatic Beneficiary Designations

In Florida, the person with power of attorney can’t change beneficiaries on specific accounts unless explicitly allowed in the document.

If they do it without permission, they might have to pay for any harm caused, depending on the rules in that place.

Conclusion

The ability to change beneficiaries with a Power of Attorney depends on state rules.

The power granted can be broad or limited, and misuse may lead to legal consequences.

Some states may mandate specific language, underscoring the importance of compliance.

Further Reading!