What happens if someone used a power of attorney to change a retirement or pension beneficiary, and can that be challenged? – North Carolina

Short Answer

In North Carolina, a power of attorney (POA) agent cannot automatically change a retirement or pension beneficiary just because the POA is “broad.” Many beneficiary changes require specific authority in the POA and must be done in a way that fits the principal’s best interests and the agent’s fiduciary duties. If the change looks like self-dealing, happened when the principal lacked capacity, or did not follow the plan’s rules, it may be challenged through an estate or civil proceeding.

Understanding the Problem

In North Carolina probate, a common question after a death without a will is whether an adult child serving (or seeking to serve) as administrator can undo a retirement or pension beneficiary change that was made using the decedent’s power of attorney. The decision point is whether the beneficiary designation was validly changed under the governing plan rules and the authority granted in the POA, or whether the change can be attacked as an improper act by the agent. This issue often comes up because retirement and pension benefits usually pass by beneficiary form, not through the intestate estate.

Apply the Law

In North Carolina, the Clerk of Superior Court has exclusive original jurisdiction over estate administration, and many disputes about estate administration are handled in that forum. See N.C. Gen. Stat. § 7A-241 (probate and estate administration jurisdiction). But retirement and pension beneficiary disputes can involve a mix of (1) the plan’s own designation requirements, (2) the scope of the POA, and (3) fiduciary-duty principles that can support court relief if an agent used the POA to benefit themselves or to override the principal’s intent.

Key Requirements

  • Authority in the POA: The agent must have the legal power to make that kind of change. Many “estate-plan-like” changes (such as redirecting who receives a death benefit) are treated as high-risk acts and often require specific, clearly granted authority rather than general language.
  • Compliance with the plan’s rules: Retirement systems and pensions typically require a particular form, method, and filing process for beneficiary designations. If the plan requires the member’s own signed designation (or a specific type of acknowledgment), a POA change that does not meet those requirements may not be effective.
  • Fiduciary conduct (no self-dealing): Even when an agent has authority to act, the agent must act loyally and avoid conflicts of interest. A beneficiary change that benefits the agent (or the agent’s close family) is a common red flag and can support a challenge.

What the Statutes Say

Analysis

Apply the Rule to the Facts: Here, the decedent died without a will in North Carolina, and the adult children are trying to open (or confirm) an estate and have one of them appointed as administrator. If a retirement or pension beneficiary was changed shortly before death using a POA, the key questions become whether the POA actually authorized that kind of beneficiary change, whether the retirement system accepted a change that met its own requirements, and whether the agent’s conduct looks like a conflicted transaction. If the change diverted benefits away from the children and toward the agent (or someone aligned with the agent), that fact pattern commonly triggers a challenge based on lack of authority, lack of capacity at the time of the change, or breach of fiduciary duty.

Process & Timing

  1. Who files: typically an heir (often the proposed administrator) or another interested person. Where: the Clerk of Superior Court in the county where the estate is administered. What: open the estate (if not already opened) and, if needed, start a contested estate proceeding to address disputes tied to estate administration and fiduciary conduct. When: as soon as the issue is discovered, especially if benefits are about to be paid out.
  2. Information-gathering step: obtain the POA document, the retirement/pension beneficiary designation history (including prior forms), and the plan’s written procedures for changing beneficiaries. In POA-abuse cases, it is often critical to identify the exact date of the change and compare it to the decedent’s health and decision-making capacity at that time.
  3. Challenge step: depending on the plan and what relief is needed, the dispute may be raised in an estate-related proceeding (for example, to address fiduciary misconduct connected to the decedent’s affairs) and/or a civil action seeking remedies such as return of wrongfully diverted funds or other equitable relief. The correct forum can depend on whether the dispute is primarily about estate administration versus a third-party plan’s payment decision.

Exceptions & Pitfalls

  • “It’s not a probate asset” confusion: many retirement and pension benefits pass by beneficiary designation, so the estate administrator may not control the asset. Even so, an improper beneficiary change can still be challenged through appropriate proceedings.
  • Plan rules can control the mechanics: some plans only honor changes made in a specific way (for example, a filed and acknowledged designation). If the plan’s statute or contract requires strict compliance, a POA signature may not be enough.
  • Self-dealing red flags: a POA agent changing a beneficiary to themselves (or to someone they favor) is a common fact pattern in fiduciary litigation. Even if the paperwork looks “complete,” the change may still be attacked as a conflicted transaction or as inconsistent with the principal’s intent.
  • Capacity and undue influence issues: if the decedent lacked capacity when the change was made, or if the agent pressured the decedent or controlled access to information, those facts can support a challenge.
  • Delay can make recovery harder: once benefits are paid out and spent, the case can become more complex. Early action can help preserve records and prevent dissipation.

For families also trying to get an estate opened and an administrator appointed, it can help to first confirm what has already been filed with the clerk and whether anyone has already been appointed. See, for example, guidance discussed in how to start the probate process and get someone appointed as administrator and how someone may have been appointed as administrator without notifying the rest of the family.

Conclusion

In North Carolina, a POA-based change to a retirement or pension beneficiary is not automatically valid just because an agent signed paperwork. The change can often be challenged if the POA did not clearly authorize that kind of beneficiary change, if the plan’s designation requirements were not followed, or if the agent acted in a conflicted way. A practical next step is to open (or confirm) the estate with the Clerk of Superior Court and promptly request the POA and the plan’s beneficiary-change records so a challenge can be evaluated before benefits are paid out.

Talk to a Probate Attorney

If a family suspects a power of attorney was used to redirect a retirement or pension beneficiary shortly before death, the next steps often depend on the exact POA language, the plan’s rules, and what has already been filed with the Clerk of Superior Court. Our firm has experienced attorneys who can help explain options and timelines. Call us today at [CONTACT NUMBER].

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.

Category: Probate Q&A Series

Author: Pierce Law

Pierce Law Group is a North Carolina law firm focused on probate administration, real estate partition matters, and surplus funds claims across North Carolina. We know these situations often come with stress, family dynamics, and time-sensitive decisions—so we prioritize clear communication, steady guidance, and a practical plan from day one. Our goal is to make a complicated process feel manageable, while protecting what matters most to you.