Elder Law FAX The October 9, 2006, issue of Elder Law FAX, a free newsletter published every other Monday by the Elder Law Practice of Timothy L. Takacs. Attorney in Fact Lacks Authority to Change Insurance Beneficiary One of the basic estate and long-term care planning documents that people make is a durable power of attorney. A power of attorney is a written document in which the "principal" appoints" an "attorney in fact" and authorizes the attorney in fact to exercise legal rights and powers on behalf of the principal.   A power of attorney is "durable" when it states in the document that the authority the principal grants to the attorney in fact continues in existence even though the principal becomes incapacitated or disabled. This qualification is important because under the common law of principal and agent, the authority of the agent to act on behalf of the principal terminates when, due to death or disability, the principal lacks the authority to control the actions of the agent.   Of course, it is precisely when the principal becomes unable to act for himself or herself that the power of attorney document becomes critical for the principal to have - so that the principal's attorney in fact (his agent) can act on behalf of the incapacitated principal.   What many people do not realize is that even though the principal may have made a durable power of attorney and vested authority to act in the attorney in fact, the authority to act is not always unlimited. This is what the sister of Brenda Langley learned.   On October 20, 1999, Brenda Gale Langley took out a $50,000 policy of insurance on her life with Tennessee Farmers Life Reassurance Company. She designated Kristin N. Taylor, Edward R. Langley, and Phillip M. Langley, three of her four children, and Ethan E. Langley, the child of Edward R. Langley, as the beneficiaries of the policy.   In August, 2002, Ms. Langley executed a durable power of attorney, naming her sister, Linda Sue Rose, as her attorney in fact.   Prior to Ms. Langley's death, her sister, acting under her authority as attorney in fact for Ms. Langley, changed the beneficiary of the policy to herself. After Ms. Langley's death, the three children, and Ms. Langley's grandchild, Ethan E. Langley, all asserted rights to the proceeds of the life insurance policy.   Ms. Rose claimed that her sister Brenda, out of frustration with her children and their lack of concern for her, requested that Ms. Rose change the beneficiary designation to herself. In November, 2002, Brenda executed a will, giving $100 to each of her children while leaving the remainder of her estate to Ms. Rose. Brenda died on March 29, 2003.   The case wound up in court and both the trial court and the Tennessee Court of Appeals sided with Brenda's children and her grandson, awarding the life insurance death benefit to them.   Under the Tennessee durable power of attorney statute, the power to change the beneficiary of a life insurance policy must be set out specifically in the power of attorney document itself.   Writing for the unanimous three-judge court, Justice Charles D. Susano, Jr., wrote, "The language of the power of attorney governs as to whether Ms. Rose possessed the authority to change the beneficiary designation on the deceased's life insurance policy. There is nothing in the language of the power of attorney that specifically authorizes Ms. Rose to change the beneficiary designation to herself or, for that matter, to anyone else. The 'beneficiary' designation under the policy is not mentioned."   In short, Ms. Rose exceeded the authority given to her in the document by her sister Brenda when she changed the beneficiary of the life insurance policy to herself. Because she lacked the authority so to do, the change in beneficiary designation was void.