Appeal from the Order of the Superior Court entered July 29, 2008 at Nos. 1330 & 1400 WDA 2007, affirming in part and reversing in part the Order of the Court of Common Pleas of Erie County entered June 15, 2007 at No. 32-2007. 965 A.2d 438 (Pa. Super. 2008).
The opinion of the court was delivered by: Madame Justice Greenspan
CASTILLE, C.J., SAYLOR, EAKIN, BAER, TODD, McCAFFERY, GREENSPAN, JJ.
ARGUED: September 15, 2009
This Court granted allocatur in order to determine whether Section 5603(q) of the Durable Power of Attorney Act, 20 Pa.C.S. §§ 5601-5611 (the Act), includes the power of the agent to change the beneficiary designation of a qualified retirement plan owned by the principal. For the reasons that follow, we hold that a principal's Power of Attorney granting the agent the power to engage in retirement plan transactions authorized his agent to change the beneficiary of the principal's retirement plan. We therefore reverse the order of the Superior Court.
On March 24, 2000, Ronald Slomski ("the decedent") executed a durable Power of Attorney ("POA") granting Rita Slomski ("Slomski"), his mother, authority to exercise control over his affairs as his agent. The POA specifically authorized Slomski to, among other things, "engage in retirement plan transactions." On May 4, 2005, the decedent completed a Beneficiary Designation Form for his retirement plan through The Thermoclad Company. The Beneficiary Designation Form also allowed the decedent to change the beneficiaries. The decedent named his wife as the primary beneficiary with his stepdaughters, Jennifer Smith and Jacilyn Snyder ("Appellees"), as contingent beneficiaries. The decedent's wife passed away on July 18, 2006.
On December 12, 2006, Slomski used the POA to change the beneficiaries of the retirement account to the decedent's siblings, Ronalee Curtis and Randall Slomski. The decedent passed away on December 28, 2006. At the time of the decedent's death, the retirement plan had a value of approximately $190,000.00. The decedent died testate leaving the estate in equal shares to Appellees, with Jennifer Smith being appointed executrix on January 5, 2007.
On February 7, 2007, Appellees filed this action for Declaratory Judgment and Preliminary Injunction seeking, among other things, to invalidate Slomski's change of the beneficiaries of the decedent's retirement account. Slomski, along with the decedent's siblings, (collectively the "Appellants") filed a motion for judgment on the pleadings. Appellees filed a cross-motion for judgment on the pleadings.
On June 15, 2007, the trial court granted Appellants' motion and held that Slomski had the authority to change the beneficiary designation of the decedent's retirement account based on clear statutory language. More specifically, the trial court held that the POA "did, in fact, include broad general language, paralleling the language set forth at 20 Pa.C.S. § 5602, empowering Rita Slomski to deal with retirement plan matters, and to exercise all powers with respect to retirement plans that the principal could if present, pursuant to 20 Pa.C.S. § 5603(q)." Tr. Ct. Order at 2. The trial court also held that the change of the beneficiary was not a gift, but rather an expectancy interest. Tr. Ct. Op. at 16.
On July 29, 2008, the Superior Court reversed and ruled that Slomski did not have the authority to change the beneficiary designation of the decedent's retirement account. Estate of Slomski v. Thermoclad Co., 956 A.2d 438 (Pa. Super. 2008). The Superior Court characterized the changing of a beneficiary as a gift, not a retirement plan transaction, and therefore concluded that it was an unlimited gift requiring a specific designation in the POA. Id. at 19. Because the POA granted Slomski the power to engage in retirement plan transactions, but did not specifically grant Slomski the authority to change the beneficiaries of the decedent's retirement accounts, the Superior Court held that Slomski could not change the retirement account beneficiary. Id.
We granted allocatur to determine "whether the 'all powers' language in 20 Pa.C.S. § 5603(q) includes the power of the agent to change the beneficiary designation of a qualified retirement plan owned by the principal." In re Estate of Slomski, 969 A.2d 1176 (Pa. 2009).
Appellants assert that the POA gave Slomski the "power to engage in retirement plan transactions." Simply put, the "power to engage in retirement plan transactions" is statutorily defined and includes the power to "exercise all powers with respect to retirement plans that the principal could if present." 20 Pa.C.S. § 5603(q). This includes the power to change the beneficiary designation on the retirement plan. If the legislature intended to limit this power, it would have done so as it limited the power of the agent to change the beneficiary designation for insurance policies. See 20 Pa.C.S. § 5603(p) (defining the "power to engage in insurance transactions"); see also footnote 2 infra. Lastly, Appellants assert that the changing of the beneficiaries does not constitute a gift because it is only an expectation and not an actual gift.
Appellees argue that although Section 5603(q) of the Act includes the power to "exercise all powers with respect to retirement plans that the principal could if present," this section must be read in conjunction with Section 5601.2, which governs gifts.*fn1 Unlimited gifts must be specifically defined in the POA pursuant to Section 5601.2(c). By changing the beneficiary designation of the retirement plan, Slomski bestowed decedent's most valuable asset upon his siblings instead of his stepdaughters. Appellees assert that because this is a gift, not a retirement plan transaction, and the POA did not specifically authorize this gift, the change of the beneficiaries should be declared void.
The Act permits a principal to give authority to an agent to engage in retirement plan transactions. See 20 Pa.C.S. § 5602(a)(18); 20 Pa.C.S. § 5603(q). Specifically, a principal can give this power to an agent simply by including the language "to engage in retirement plan transactions" in a POA. 20 ...