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Power of Attorney Used to Change Insurance Beneficiaries

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MARCH 29, 2004 VOLUME 11, NUMBER 39

Thomas A. Smith had two daughters from his first marriage and two step-children from his second wife. In 1996, shortly after his second wife’s death, he changed the beneficiary designation on a $100,000 life insurance policy so that the four children would share the policy proceeds equally. In 1998 he apparently decided to change beneficiaries to name only his two daughters. Unfortunately, the paperwork was somehow misplaced.

Mr. Smith signed an entire collection of documents in 1998. He created a revocable living trust, with a provision that on his death all assets would be divided between his two daughters. His longtime financial planner, Bryan Behrens, was identified as successor trustee, to take over in the event that Mr. Smith became unable to handle the trust’s finances. He also signed a power of attorney naming Mr. Behrens as his agent.

At the same time that he signed the other documents, Mr. Smith signed a new beneficiary designation form for the life insurance policy. The new form directed that the policy proceeds would be paid to the trust, and thus to his daughters. According to both Mr. Smith’s attorney and Mr. Behrens, the form was mailed to the insurance company that same day.

Three years later Mr. Smith was on an out-of-state vacation when he became ill. He began to worry about the life insurance beneficiary designation, because he could not remember receiving a confirmation of the change. He asked Mr. Behrens to check on its status for him.

Mr. Behrens called the insurance company and found that the form had never been received. Rather than delay further, he simply signed a new beneficiary designation form as Mr. Smith’s agent, using the durable power of attorney. Mr. Smith died just eight days after Mr. Behrens signed the new form.

The insurance company could not decide whether to pay the life insurance benefit to Mr. Smith’s trust or to the four children directly. It filed an action called an “interpleader,” in which it submitted the policy proceeds to the court and asked the judge to decide who should receive the money.

The Nebraska Supreme Court was faced with an interesting question. Can an agent named in a durable power of attorney change beneficiaries on the principal’s life insurance policies? At least under Nebraska law, ruled the Justices, the agent had that power in this case—partly because the agent was a neutral person and received no benefit from the change himself. First Colony Life Insurance Company v. Gerdes, March 19, 2004.

In Arizona, it is not clear whether an agent under a power of attorney has the authority to change beneficiaries on an insurance policy, annuity, or similar arrangement. Nebraska’s approach is appealing, and Arizona might ultimately adopt a similar rule limiting the authority to those circumstances where the agent does not benefit from the transfer. Of course, if Mr. Smith had named one of his daughters as agent (as most people do), that might mean that the change could not be completed even though it appears that there was plenty of evidence that Mr. Smith actually wanted to make the change.

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Robert B. Fleming


Robert Fleming is a Fellow of both the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys. He has been certified as a Specialist in Estate and Trust Law by the State Bar of Arizona‘s Board of Legal Specialization, and he is also a Certified Elder Law Attorney by the National Elder Law Foundation. Robert has a long history of involvement in local, state and national organizations. He is most proud of his instrumental involvement in the Special Needs Alliance, the premier national organization for lawyers dealing with special needs trusts and planning.

Robert has two adult children, two young grandchildren and a wife of over fifty years. He is devoted to all of them. He is also very fond of Rosalind Franklin (his office companion corgi), and his homebound cat Muninn. He just likes people, their pets and their stories.

Elizabeth N.R. Friman


Elizabeth Noble Rollings Friman is a principal and licensed fiduciary at Fleming & Curti, PLC. Elizabeth enjoys estate planning and helping families navigate trust and probate administrations. She is passionate about the fiduciary work that she performs as a trustee, personal representative, guardian, and conservator. Elizabeth works with CPAs, financial professionals, case managers, and medical providers to tailor solutions to complex family challenges. Elizabeth is often called upon to serve as a neutral party so that families can avoid protracted legal conflict. Elizabeth relies on the expertise of her team at Fleming & Curti, and as the Firm approaches its third decade, she is proud of the culture of care and consideration that the Firm embodies. Finding workable solutions to sensitive and complex family challenges is something that Elizabeth and the Fleming & Curti team do well.

Amy F. Matheson


Amy Farrell Matheson has worked as an attorney at Fleming & Curti since 2006. A member of the Southern Arizona Estate Planning Council, she is primarily responsible for estate planning and probate matters.

Amy graduated from Wellesley College with a double major in political science and English. She is an honors graduate of Suffolk University Law School and has been admitted to practice in Arizona, Massachusetts, New York, and the District of Columbia.

Prior to joining Fleming & Curti, Amy worked for American Public Television in Boston, and with the international trade group at White & Case, LLP, in Washington, D.C.

Amy’s husband, Tom, is an astronomer at NOIRLab and the Head of Time Domain Services, whose main project is ANTARES. Sadly, this does not involve actual time travel. Amy’s twin daughters are high school students; Finn, her Irish Red and White Setter, remains a puppy at heart.

Famous people's wills

Matthew M. Mansour


Matthew is a law clerk who recently earned his law degree from the University of Arizona James E. Rogers College of Law. His undergraduate degree is in psychology from the University of California, Santa Barbara. Matthew has had a passion for advocacy in the Tucson community since his time as a law student representative in the Workers’ Rights Clinic. He also has worked in both the Pima County Attorney’s Office and the Pima County Public Defender’s Office. He enjoys playing basketball, caring for his cat, and listening to audiobooks narrated by the authors.