Why would my attorney recommend a payable on death account?
Ask the LDA
April 30, 2022
With a payable on death account or paid on death account, you name a beneficiary who gets the account when you die-no probate, no hassle. The person you name has no rights to the money until you die, so you can spend it all or change the beneficiary whenever you want.
A payable on death account is created when you make an agreement with your financial institution – usually your bank. The bank has a formal, legal agreement that lets you tell the bank who they should hand over your money to after you pass away. The agreement ensures that your wishes are documented in an agreement. The form is usually bank specific and it is filled out at the bank. The bank will keep it on file.
Keep in mind that this type of arrangement will typically override instructions in a Will or any other financial Estate Planning document like a trust.
The benefits of a Payable on Death instruction to your bank are they are simple to open, the process to access the funds for the beneficiary is easy, there is no cost to set it up and there is no limit on the amount of money that can be in the account.
Multiple Beneficiaries: While the account's owner is still alive, they may name as many beneficiaries of their POD account as they wish. The proceeds may be split evenly between all of the named beneficiaries, or divided in any way that the owner prefers.
Diana Wade is a Legal Document Assistant. She can be reached at (661) 821-0494 or email@example.com. Diana is not an attorney; she can only provide self-help services at your specific direction. Kern County LDA #185, ex 4/11/23.