When a person passes away, his or her estate is usually distributed by a probate court. This court-supervised process tends to be expensive and time-consuming, so most people attempt to avoid it by establishing a trust or creating a payable-on-death account. The latter, which are also known as PODs, are set up for a number of different kinds of bank and investment accounts and are one of the best ways to avoid probate, as they allow the funds contained in the designated account to pass directly to the named beneficiary upon the account holder’s death. If you have questions about creating a payable-on-death account, or other options for avoiding probate disputes, it is important to speak with an experienced contested estates attorney for advice.
What are Payable-on-Death Accounts?
POD designations can only be set up for certain types of assets, namely bank accounts and investment accounts. The former includes savings and checking accounts, while the latter applies to certificates of deposit and savings bonds. When these types of accounts are set up properly, their contents are transferred directly to the named beneficiary when the owner passes away. At this point, all the beneficiary is required to do is show identification to the bank, provide a copy of the decedent’s death certificate, and complete a few additional forms, after which, the money in the account will be distributed to him or her. This is true even if the owner also had a will or revocable trust that provides for something different. If a POD account has more than one owner, it will not become available to the beneficiaries until the last surviving owner has passed away.
It is also important to note that a POD account does not have to be paid equally if there is more than one beneficiary, as account holders are permitted to specify how the assets will be divided in the beneficiary designation form. In the event that a beneficiary predeceases the owner and he or she does not designate a new beneficiary, the contents of the account will be divided with the rest of the decedent’s estate through the probate process.
Creating a POD
The process of designating a POD account is relatively simple and only requires the account holder to complete a form and then sign to select one or more beneficiaries. POD account holders are permitted to change beneficiaries whenever they want by submitting new paperwork and also have the option of naming multiple beneficiaries. Only the owner of the account retains access to and control over the funds until he or she passes away or revokes the POD designation.
Contact Us Today for Help with Your Estate-Related Questions and Concerns
If you have questions about the pros and cons of creating a POD, you should speak with an experienced attorney who can address your concerns. To consult with one of the experienced estate planning attorneys at Orlowsky & Wilson, Ltd. Attorneys at Law about ways to avoid the probate process or having your own estate contested, please call 847-325-5559 or contact our legal team online today.