My sister and I each hold POA for my mom with dementia. My sister changed mom's life insurance. Is this legal?

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.

You did a great job getting this handled. I hope your sister cooperates on the policy and things work out within the family.

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.

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.

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.

What action did your attorney advise you to take?

FYI Follow-up. Per the attorney who created the POA, the actions taken by my sister to transfer monies away from my mothers family burial benefit where criminal.

Thank you all

Regardless of whether an attorney prepared the POA or not - read the doc over carefully. If the power to tinker with insurance policies was not specifically addressed than you can have the situation corrected. If it is included you have a fight on your hands and could wind up paying more in attorney fees to maybe get it reverted back - and there is the possibility of loosing in addition to the cost of the fight.

So again, check the POA first - then decided your action plan.

I discovered this was changed because my sister, who had been paying my mothers bill (with my mother funds) decided to stop having any responsibility and it became my responsibility as of last week. I requested a family meeting and I brought up any matter I felt I should know (doctors, bills, rent, medications and insurance) and she advised me of the change. Her husband who was also in the meeting had no idea he was made the beneficiary. Yes an attorney prepared the POA. I am sure she did this feeling entitled/wanting the 10k.

Oh my. Such a mess. Have you considered taking your mother to see her attorney? Perhaps change her POA again??
At the very least you could stop the payment.
As Rainmom said, if your POA allows it a POA agent CAN change the policy ownership and beneficiary. So you need to see just how your POA reads. How did you find out? What was your sisters reasoning? You say she refused to change it back so she knows that you know.
Did an attorney prepare the POA?

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.

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.

Right Vegas Lady. Wasn't thinking about her mom possibly not being owner. Good point.

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.

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.