Can a durable POA add her name to the life insurance policy of her parent?

In my understanding on POA, a POA should always do their best “fiduciary duty” which means they should NOT do things that directly benefit themselves.

So a POAs, in my understanding, for a father, writing a check just because they need $ from their dads bank account to themselves for $800 is bad POA fiduciary duty, but writing a check for $876.54 to themselves that matches up precisely to a receipt for $876.54 from ABC Plumbing for work at Dads house is bad judgment as a POA but not exactly bad fiduciary duty. But POA better keep all those receipts & for years because should Dad run out of money and need to file a LTC Medicaid application all those checks to the POA will look like “gifting” of Dads and cause a transfer penalty and ineligiblity for Medicaid. LTC Medicaid will want all this information in a matter of days or weeks.

But back to the insurance: issue with most* life insurance policies as to its being an “asset” is that, life insurance pay beneficiary after death. So technically Sissy has NOT yet gotten a benefit from the change from 50% to 100% as mom is not dead. POA has no direct benefit yet.
BUT
To me, bigger issue I’d look into is whether or not Insurance Co or its underwriter requires the insured - your mom - to be the one to actually do the change. That it has to, HAS TO, to be mom as the owner of the policy to do the change legally. It cannot be done by others. Mom has to personally sign and be competent to do so. I’d look into that and this is something your State Dept of Insurance can get involved in as it’s insurance fraud and they take this stuff seriously.

* if this is a Whole life or a GUL and a cash build that Sissy is spending, somebody asap needs to read the fine print on the policy. She could be changing underwriting terms.

So Sissy supposedly did this to enable her to pay for funeral costs? Well did Sissy do a preneed contract with a FH? That would seal the deal that she very much wants to right now streamline after death stuff. You could contact FHs to get info on preneed stuff and give to her so to try to force her hand to buy this. Fwiw this is 100% an ok “spend down” should in the future mom need to apply for LTC Medicaid.

Are there other things? And if so just what are they?

POA is not the same as beneficiary, so I would sure question that move, but perhaps it is actually legal.

I do not think your sister should be allowed to declare herself as beneficiary of anything for which your mother has not already named a beneficiary.

I like Alva Deer's point that it would be highly unusual for an incurance company to sell a policy without a named beneficiary in order. A beneficiary is the reason for having a life insurance policy

Ask your sister about it point-blank.

People never seem to confront the person doing the questionable behavior directly.

If she claims it's for final expenses, point out to her that her POA expires at your mom's death, so she's not doing it correctly. Both of you (if you're the only heirs) should be on the policy as beneficiaries.

If she doesn't agree to do that, then I'd contact an attorney or the insurance company to see if she's done something illegal.

Agree with "olddude." Ask insurance company for a new beneficiary change form. Then you and your sister help your mom complete form naming both of you as beneficiaries with a 50/50 split. If the life insurance policy remains solely in your sister's name, the life insurance company will mail your sister a check for the proceeds after she provides mom's death certificate. Naming both of you as equal percentage beneficiaries would eliminate any suspicion or hint of impropriety and keep your sister's name golden! Good luck.

When I took over my father’s bills I discovered he had a few life insurance policies. One large one and two smaller ones. Both my brother and I were named as beneficiary on two of them, but only myself was on the third one. When my dad died I just wrote my brother a check for half of the one that paid out that he was not on. But what I was taken back by was that there was a simple form to fill out and mail in to change the beneficiary of the policies. It was sent in an email correspondence by the company along with the copy of the large policy I requested to have for my files. I asked the representative if beneficiaries are notified if they are removed or added to a policy. She said no they are not. Anyone added would eventually be alerted they were eligible to file a claim, but anyone removed would not be notified. If I had been the type of person to do so I simply could have filled out the form, had my father sign it (he had dementia and didn’t know what he was signing) and mail it in. My brother didn’t even know about the policies until I told him so he would never have been the wiser. Scary.

I would contact an experienced Elder Law Attorney. Many times consultations are free. In my mother's case, she was "starting" to have cognitive impairment but she knew what she was signing. Between me, my brother and my sister, I'm the only one who stepped up to help my mother navigate paying her bills, taking her to doctors appointments and generally keeping all the details of her financial life in order. I sat down with Mom one day (just me and her) and spoke with her regarding her insurance policies and beneficiary designations. My father was her designated beneficiary on all her life insurance policies but he had died 10 years prior. She knew I was the only "competent and trustworthy" sibling to handle her affairs then and after she passed. She agreed to make me sole beneficiary on all her life insurance policies (which were 3) as she trusted me to handle all the details of her estate (i.e. fixing up, cleaning out, and selling her home, paying for funeral expenses, etc.) after she passed. I was also her sole executor for her estate.

Honestly, I never told my brother or sister that she did this nor did my Mom tell them that I know of. Neither my brother or sister ever asked because neither of them wanted to "get involved" with handling all the paperwork of settling an estate and all the details involved. They were thrilled they didn't have to do it and they trusted me.

Therefore, when I received those beneficiary proceeds checks, I just put them into my Mom's checking account (which was jointly owned by me and her) and I kept a meticulous accounting of every check I wrote for estate expenses. When we discussed me being the only beneficiary on her life insurance accounts, I told Mom it would make life easier for me not to deal with running around after my brother and sister to get $$ from them for estate expenses. She agreed completely.

Ultimately it was a LOT of work cleaning out my parents house of 50 years worth of "stuff" and memories. Neither of my siblings helped and, honestly, it was easier for me that they didn't. They would have wanted to keep everything. I clean, washed, donated, painted, repaired and did tons of work to get the house ready for sale ~ even got my brother (who lived with her) settled into a beautiful apartment using dishes, utensils, some furniture and other things from her estate to set his apartment up. It took me over a year to do this because 6 months after my Mom died, my in-laws died within a week of each other and my husband was in the exact position as I was in with my mother. So now I had ANOTHER home of 50 years worth of stuff to clean, wash, donate, repair, etc. My husband was the sole designated beneficiary on all my in-laws accounts and investments because, he too, was the only "competent" one of his siblings. Now I had to meticulously keep track of two more estates! And theirs were WAY more involved than my Mom's. I was retired but my husband was and is still working full time, so the majority of the paperwork and home details were handled by me.

Being competent can be a curse! LOL

Ouch. Sounds fishy. I'd think she'd add both of you 50/50.
Get a lawyer

Mom should have had beneficiaries listed. I am surprised the Insurance company didn't mandate it. It takes a Judge to determine who receives the money unless stated in a Will. I don't question your sister having Mom assign one, I do question why both of you were not listed. Seems this is an acct that can be withdrawn from. Maybe Sis needs it to pay for Moms care or bills. Works like a checking acct. Read up on it.

"A primary beneficiary is a person or entity named to receive the benefit of a will, trust, insurance policy, or investment account. More than one primary beneficiary can be named, with the grantor able to direct particular percentages to each."

Seek Elder Law Attorney direction.

This is not making a whole lot of sense to me. I cannot, frankly, imagine an extant insurance policy that has no beneficiary listed. What kind of company would issue insurance without the listing of beneficiaries?

Given I cannot imagine such a thing I can only say that your Sister is currently acting as POA for a mom who isn't competent. She is under no obligation to share anything about what she is doing with anyone other than the COURTS if the courts have any questions. A POA must keep meticulous records. Of all actions. If you suspect fraud you should first tell your sister you are concerned she may be committing fraud and that you will be reporting her to the court, so she should get her records ready. Then you should consult an attorney with your suspicions and any evidence you have of fraudulent activity.

The attorney will ask the courts to request an accounting by the POA if there is any evidence.

You may want first to consult APS for suggestions and they may do a simple investigation. This may be enough to reassure you. It is illegal for a POA to "enrich" him or herself.