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My sister and I each hold POA for my mom who is diagnosed with Dementia. My sister changed my mothers life insurance via POA to show her as the owner and listed her husband as the beneficiary once I discovered this she refuses to change this back to show a family member as beneficiary. This is a small 10,000 policy but was for my moms end of life expenses and burial. Is what she did legal?

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No. It was my understanding that no one can change a beneficiary but your mother. Contact the insurance company and ask for proof of how it was changed and when. You may have to get an attorney involved.
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Actually- it is legal for a POA to change a life insurance beneficiary BUT ONLY if that specific power is spelled out and granted in the POA document that the principal signed.

There is only one thing that is illegal for a POA to do - under any circumstances and that is to change a will. This is true of all 50 states.
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Revocation of my sisters POA with formal letter to return insurance ownership to my mother listing myself or our other sibling as beneficiary. Note... My mothers dementia has not progressed past short term memory loss and is capable of deciding some affairs.
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Mom signed a revocation of POA for my sister today and also signed a new POA today. Attorney suggest formal letter from my mother requesting the insurance be corrected in order to save atty fees. But, atty is willing to send the letter if needed.
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The owner of the policy can change the beneficiary, not the person who is insured. If mom was the owner she may have agreed to transfer ownership to sister, who then could change the beneficiary. I got insurance on my ex so I could afford to bury him when the time.comed. I pay the premium and was the beneficiary. We changed ownership to me (so he couldn't change the beneficiary) and all is ok. Check with the insurance company as to what their rules are.
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Right Vegas Lady. Wasn't thinking about her mom possibly not being owner. Good point.
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Thank you for the answers: To clarify, my mother was the policy owner, my sister changed the ownership via POA to herself and then changed the beneficiary to her husband, outside the family. (So she could pocket 10k up on my mothers death). My mom knew/knows nothing of the change and definitely would not have agreed to allow a non sibling to be the beneficiary. The policy is still being paid out of my mothers pension funds.
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Will the attorney be sending the letter? Will your mom be signing a new POA? I ask so we can all learn along with you.
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You did a great job getting this handled. I hope your sister cooperates on the policy and things work out within the family.
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You did the right thing consulting an attorney and taking proper legal action to correct the policy. I hope that there isn't a falling out in the family over it. If however, there is, please don't let your sister make you feel badly for taking legal action. You did what was right for your mother. Your sister demonstrated herself self-interest. She was quite cunning at it as well. Thanks for sharing your story. It is a lesson about trust for all of us.
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