ST. LOUIS — A Missouri appellate court has upheld a lower court ruling that denied a couple the right to designate themselves as beneficiaries of four financial accounts belonging to the late Thomas L. Nicastro, which held a combined balance of $256,530.58.
The decision affirms that the durable power of attorney (DPOA) executed by Nicastro did not explicitly authorize Samuel and Sheryl Rowley to make themselves payable-on-death (POD) beneficiaries, according to the opinion filed Feb. 25 in Missouri Court of Appeals-Eastern District.
The court's ruling, issued in response to the Rowleys' appeal, reinforces Missouri's strict interpretation of DPOAs to prevent fiduciaries from engaging in self-dealing unless explicitly authorized.
In the case, the appellate court agreed with the Archdiocese of St. Louis, the original POD beneficiary, that the language of Nicastro's DPOA did not grant the Rowleys the authority to alter beneficiary designations in their favor.
The dispute originated after Nicastro's death on May 7, 2022.
Nearly a year before his passing, on July 28, 2021, Nicastro designated the Archdiocese of St. Louis as the sole POD beneficiary of his accounts at First Community Credit Union. However, on May 5, 2022—just two days before Nicastro's death—Sheryl Rowley presented First Community with a change-of-beneficiary form, naming herself and her husband as the new beneficiaries.
She also provided the DPOA executed by Nicastro on May 4, 2022, which granted the Rowleys broad authority to manage his affairs.
First Community denied the requested change, citing uncertainty about whether the DPOA's language sufficiently authorized the Rowleys to make themselves beneficiaries. The credit union subsequently filed an interpleader action in court, seeking a legal determination of the rightful beneficiary.
The trial court sided with the Archdiocese, ruling that the DPOA did not explicitly empower the Rowleys to alter the POD designations. It ordered the funds to be paid to the Archdiocese. The Rowleys appealed, arguing that the DPOA granted them the authority to change beneficiaries and use Nicastro's property for their benefit.
In its decision, the appellate court rejected the Rowleys' arguments. It emphasized that Missouri law requires explicit and unambiguous language to authorize self-dealing by an agent acting under a DPOA. While the DPOA included a provision allowing the Rowleys to "use [Nicastro's] property to benefit them," the court found this language too vague to permit the beneficiary change.
The court also dismissed the Rowleys' claim that Nicastro gave them oral instructions to make the change. Missouri law prohibits relying on oral statements to interpret a DPOA due to the risk of fraud and the inability of a deceased principal to refute such claims.
Additionally, the appellate court granted a motion by the Archdiocese to strike certain documents from the Rowleys' legal file. The documents related to a separate case involving Nicastro's accounts at Vantage Credit Union and were deemed irrelevant to the current appeal.
The court noted that the Missouri Durable Power of Attorney Act imposes a fiduciary duty on agents to preserve a principal's beneficiary designations unless an exception is clearly articulated in the DPOA. It concluded that the Rowleys failed to demonstrate such an exception.
"Well-established rules of interpretation of powers of attorney dictate that broad, all-encompassing grants of power to the agent must be discounted," the court stated, citing previous case law.
As a result of the ruling, the $256,530.58 held in the accounts will be awarded to the Archdiocese of St. Louis. The court's decision underscores the importance of clear and precise language in estate planning documents, particularly when granting authority to agents to make decisions that benefit themselves.
The appellants are represented by Matthew J. Frawley
The Archdiocese of St. Louis is represented by Matthew H. Noce and Kyle C. Westbrook.
First Community Credit Union is represented by Kevin P. Clark.
Attorneys declined to comment further on the case.
Missouri Court of Appeals, Eastern District: ED112630