Responding to a Power of Attorney Agent’s Request To Add or Change a Right of Survivorship or Beneficiary Designation Credit unions sometimes are asked by an agent under a power of attorney (POA) to have a person added as joint owner to the account of a member (the principal under the POA). Or a POA agent may seek to add or change a payable-on-death or other beneficiary designation on the member’s account. In some cases, the agent may seek to add himself or herself, or a family member, as joint owner or beneficiary on the account. What is significant in all these situations is that the agent is seeking to act in a way that will create (or take away) a right of survivorship in the member’s account upon the member’s death. Naturally this raises concerns. How should the credit union respond? The Uniform Power of Attorney (Va. Code §64.2-1600 et seq.), as adopted in Virginia, has rules that address whether an agent may create or change a right of survivorship or beneficiary designation. See Va. Code §64.2-1622. It is helpful to break down these rules through a step-by-step process, focusing on: i) what the POA says, and ii) the relationship of the POA agent to the member on whose behalf the agent purports to act: In all cases, the POA must expressly grant the agent the authority to create or change rights of survivorship or beneficiary designations. The first question is whether the POA has language granting such authority to the agent. If it does not, then the agent is prohibited from creating or changing survivorship rights or beneficiary designations for anyone. If it does contain such language, then the following rules apply. Even if the POA contains the grant of authority to create or change rights of survivorship or beneficiary designations, if the agent is not an ancestor, spouse, or descendant of the member, such agent may not create in the agent, or a person to whom the agent owes an obligation of support, any survivorship or beneficiary rights, unless the grant of authority expressly says the agent may create such survivorship or beneficiary rights in himself or herself or in a person the agent supports. In other words, if the POA merely says the agent shall have the authority to create or change rights of survivorship and beneficiary designations, without more, the agent may not rely on that authority to make any such change that will benefit the agent personally or someone the agent supports. But if the POA says the agent may exercise such authority by creating a right of survivorship or beneficiary designation in the agent or someone the agent supports, the agent may do so. 3. But if the agent is an ancestor, spouse, or descendant of the member, the general grant of authority described in 1 above is sufficient to give such agent the authority to create in the agent, or someone the agent supports, a right of survivorship, whether as joint owner or beneficiary. Thus, the POA does not need to expressly state that the agent has the right to name himself or herself (or someone he or she supports) as joint owner or beneficiary as long as the agent is: i) authorized under the POA to create or change rights of survivorship or beneficiary designations, and ii) the agent is an ancestor, spouse, or descendant of the member. It may be helpful to follow a process like this when confronted with such a request. Please direct any questions or comments to your League's Compliance Hotline - 800.552.4529.
