Can Power of Attorney override POD designations?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
fsrph
Posts: 850
Joined: Sun Jul 26, 2009 7:54 pm
Location: Pa.

Can Power of Attorney override POD designations?

Postby fsrph » Thu Apr 20, 2017 7:56 pm

I use POD's (payment on death) on all my CDs. Down the line, hopefully many years from now, if my health deteriorates I plan to grant power of attorney to another person. Now I know to ask someone you completely trust and will honor your wishes. But, I was wondering what if they end up being not so honest and want to change my POD designations? Can they do this?

Francis
"Success is getting what you want. Happiness is wanting what you get." | Dale Carnegie

earlyout
Posts: 1285
Joined: Tue Feb 20, 2007 5:24 pm

Re: Can Power of Attorney override POD designations?

Postby earlyout » Thu Apr 20, 2017 8:07 pm

You best do it before you health deteriorates too far or it may be too late. With that said, it's my understanding that most durable POAs give the agent power to do whatever you could do. If you can change the POD clause of your CDs, agents with POA powers could do the same. If you don't trust them to not change your CDs why trust them with anything? However, if this is really a potential problem, you could limit the powers granted and prohibit them from changing your CDs.
Last edited by earlyout on Thu Apr 20, 2017 8:10 pm, edited 2 times in total.

Silk McCue
Posts: 272
Joined: Thu Feb 25, 2016 7:11 pm

Re: Can Power of Attorney override POD designations?

Postby Silk McCue » Thu Apr 20, 2017 8:08 pm

The answer is: It depends.

Please read this reference to get a sense of what is at play in this situation.

From my read you can construct the Power of Attorney to prevent this from happening.


http://info.legalzoom.com/can-power-att ... 21711.html

EddyB
Posts: 236
Joined: Fri May 24, 2013 3:43 pm

Re: Can Power of Attorney override POD designations?

Postby EddyB » Thu Apr 20, 2017 8:17 pm

Silk McCue wrote:The answer is: It depends.

Please read this reference to get a sense of what is at play in this situation.

From my read you can construct the Power of Attorney to prevent this from happening.


http://info.legalzoom.com/can-power-att ... 21711.html


And in (at least) some states, unless the POA specifically grants authority to change beneficiaries, the attorney-in-fact will not have authority to do so even if the principal may have wanted that. Makes sense to consider state law and perhaps even discuss with an attorney, if you want the POA to mean what you intend.

fsrph
Posts: 850
Joined: Sun Jul 26, 2009 7:54 pm
Location: Pa.

Re: Can Power of Attorney override POD designations?

Postby fsrph » Thu Apr 20, 2017 8:22 pm

Silk McCue wrote:The answer is: It depends.

Please read this reference to get a sense of what is at play in this situation.

From my read you can construct the Power of Attorney to prevent this from happening.


http://info.legalzoom.com/can-power-att ... 21711.html


Thanks. That article is very informative.
"Success is getting what you want. Happiness is wanting what you get." | Dale Carnegie

123
Posts: 2069
Joined: Fri Oct 12, 2012 3:55 pm

Re: Can Power of Attorney override POD designations?

Postby 123 » Thu Apr 20, 2017 8:33 pm

I would bet that there is a lot of variation among brokerage and bank online systems in terms of what they can enforce with regard to provisions of a POA.

If the individual with the POA is able to get online access to your accounts there may be no assurance that their actions are limited in accordance with the POA. From personal experience I know that Schwab seems to be very good with granting a limited POA user for an account to allow trade execution only (no ability to change address or withdraw funds). I haven't really investigated this with other banks or brokerage
The closest helping hand is at the end of your own arm.

J295
Posts: 1004
Joined: Sun Jan 01, 2012 11:40 pm

Re: Can Power of Attorney override POD designations?

Postby J295 » Fri Apr 21, 2017 7:18 am

The other posters are correct that the answer to your specific question is a matter of state law (including the specific language of your power of attorney).

If you don't want to authorize the Agent under your POA to alter beneficiary designations you could have your counsel draft the POA to cover this issue. From my perspective, that seems like a fair amount of work and expense that (at least for us) would be unnecessary. We have agents under our POAs that we trust completely. After all, that is why we choose them.

You didn't ask, but I'll add this ..... generally speaking I'm a fan of durable POAs that are effective immediately upon signature with as broad as powers as legally permitted, and not a fan of springing POAs.

If you have someone you trust for this role, I wouldn't wait on this or the other basic estate plan documents (will/trust, POA, POA for health care, asset review).

Best of luck

User avatar
midareff
Posts: 4656
Joined: Mon Nov 29, 2010 10:43 am
Location: Biscayne Bay, South Florida

Re: Can Power of Attorney override POD designations?

Postby midareff » Fri Apr 21, 2017 7:21 am

earlyout wrote:You best do it before you health deteriorates too far or it may be too late. With that said, it's my understanding that most durable POAs give the agent power to do whatever you could do. If you can change the POD clause of your CDs, agents with POA powers could do the same. If you don't trust them to not change your CDs why trust them with anything? However, if this is really a potential problem, you could limit the powers granted and prohibit them from changing your CDs.


If you pass the POA passes with you.

wassabi
Posts: 331
Joined: Sun Feb 02, 2014 8:06 am

Re: Can Power of Attorney override POD designations?

Postby wassabi » Fri Apr 21, 2017 4:44 pm

I'm power of attorney for someone and can absolutely change beneficiaries, POD, TOD, etc. Doing so would set me up for a lot of scrutiny by family members and potentially even a lawsuit, but I do have the power to make the change.

A POA can be issued with narrow or more specific/limited powers, but full POA has the legal authority to change a POD.

User avatar
dm200
Posts: 12402
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Can Power of Attorney override POD designations?

Postby dm200 » Fri Apr 21, 2017 4:56 pm

I am not an attorney, but deal with similar types of issues.

The specific answer depends on applicable state law and the details of the Power of Attorney.

If you do not want the designated "attorney in fact" to be able to change POD/TOD designations, then it is my understanding that you could/should make this clear in the PoA document itself. An attorney experienced in such matters should be able to draft the correct language.

earlyout
Posts: 1285
Joined: Tue Feb 20, 2007 5:24 pm

Re: Can Power of Attorney override POD designations?

Postby earlyout » Mon Apr 24, 2017 5:35 pm

midareff wrote:
earlyout wrote:You best do it before you health deteriorates too far or it may be too late. With that said, it's my understanding that most durable POAs give the agent power to do whatever you could do. If you can change the POD clause of your CDs, agents with POA powers could do the same. If you don't trust them to not change your CDs why trust them with anything? However, if this is really a potential problem, you could limit the powers granted and prohibit them from changing your CDs.


If you pass the POA passes with you.

Yes, a POA is only good as long as you are alive. People need to have a POA in place so that a trusted individual can conduct their affairs should they become unable to act for themselves. Without a POA the courts will usually appoint a guardian and that may or may not work out as the individual would like.

Gnirk
Posts: 616
Joined: Sun Sep 09, 2012 3:11 am
Location: Western Washington

Re: Can Power of Attorney override POD designations?

Postby Gnirk » Mon Apr 24, 2017 6:12 pm

Our Durable Powers of Attorney state specifically that the DPOAs cannot change any estate plans. A POD or other beneficiary designations would, I believe, be part of an estate plan and they would be unable to change them. Otherwise they have the same powers that we would have.

User avatar
tinscale
Posts: 339
Joined: Thu Dec 17, 2009 11:16 pm
Location: North Carolina

Re: Can Power of Attorney override POD designations?

Postby tinscale » Mon Apr 24, 2017 6:33 pm

Some institutions require their own POA (e.g, Scottrade). So, if one had non-Scottrade POA and wanted to change beneficiaries, the account owner and agent would have to execute a Scottrade POA and have it notarized.

If the account owner was not capable of filling out the form, I'm not sure what would happen.


Return to “Personal Finance (Not Investing)”

Who is online

Users browsing this forum: advice789, BeneIRA, crestone, doug1022, Gatorbh, ICMoney, jebmke, kramer, magazinewriter, neilpilot, Nova1967, Pranav, slazers, zakath47 and 68 guests