A power of attorney (POA) allows someone to make decisions for you when you can’t.
This person, your agent, can handle financial and healthcare matters based on the POA document.
You can choose anyone you trust for this role.
A power of attorney may also change a beneficiary for your accounts. Let’s explore their responsibilities and this potential impact.
What Does a Power of Attorney Do?
A general or financial power of attorney handles various financial matters, like real estate, banking, and debts.
They can write checks, deposit money, invest, and file taxes. In contrast, a limited power of attorney has restricted access, often managing specific tasks like retirement accounts or medical bills.
Both types must follow the document’s guidelines, which could be long-term or temporary, such as during your absence from the country.
Can a Power of Attorney Change a Beneficiary
Your power of attorney can only act as specified in the POA. If it doesn’t mention changing beneficiaries of accounts, they can’t do it.
To enable this, create a new POA specifying the power.
If the POA allows it, they can change beneficiaries, but must follow your wishes.
To make changes, present the relevant document to financial institutions for review.
The Bottom Line
A power of attorney can modify financial beneficiaries only if specified in the POA.
Consulting a legal professional before granting this power is wise to prevent potential misuse.
Naming a power of attorney can offer safeguards but also carries risks, so choose someone trustworthy.
Grant only necessary powers, and if changing beneficiaries isn’t in the POA, there’s no need for concern.
Any power of attorney agent is legally obliged to act in good faith and meet the principal’s reasonable expectations, placing the principal’s best interests first within the POA’s defined authority.
Don’t attempt to draft a POA on your own. Seek the expertise of experienced lawyers to provide guidance on the process.