Reversing an appeals court, the Supreme Court of Pennsylvania rules that a durable power of attorney allowing the attorney-in-fact to "engage in retirement plan transactions" also confers the power to change a retirement plan's beneficiaries. In Re Estate of Slomski (Pa., Nos. 5 WAP 2009 & 6 WAP 2009, Dec. 28, 2009).
Ronald Slomski executed a durable power of attorney (POA) naming his mother, Rita Slomski, as his attorney-in-fact. The POA specifically granted the agent the power to "engage in retirement plan transactions." Shortly before Mr. Slomski passed away, Mrs. Slomski, acting under the durable power of attorney, changed the beneficiary designation on Mr. Slomski's $190,000 retirement plan, removing Mr. Slomski's deceased wife as the primary beneficiary and his two step-daughters as the contingent beneficiaries and naming Mr. Slomski's siblings (Mrs. Slomski's other children) as the primary beneficiaries of the plan instead. After Mr. Slomski died, his step-daughters sought a declaratory judgment and a temporary injunction that would invalidate the change of beneficiaries.
The trial court ruled that Mrs. Slomski had the power to change the beneficiary disignations, but an appellate court reversed, explaining that although the POA granted Mrs. Slomski the power to engage in retirement plan transactions, it did not specifically grant her the authority to change the retirement plan's beneficiaries The Supreme Court of Pennsylvania granted allocatur to determine whether the state POA statute's grant of the power to "exercise all powers with respect to retirement plans" includes the power of the agent to change the beneficiary designation of a qualified retirement plan owned by the principal.
The Supreme Court of Pennsylvania reverses the appeals court's decision, finding that Mrs.Slomski had the authority to change the retirement plan beneficiaries. The court rules that "while the power to engage in retirement plan transactions does not specifically include the ability to change the beneficiary designations, it does authorize the agent to 'exercise all powers with respect to retirement plans that the principal could if present' . . . [B]ecause the POA included the exact statutory language 'to engage in retirement plan transactions,' [Rita] Slomski was authorized to change the beneficiaries of the retirement plan to the decedent's siblings as this clearly was a power the decedent also had."
For the full text of this decision, go to: https://www.aopc.org/OpPosting/Supreme/out/J-68A&B-2009mo.pdf.
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