Pros of a POD
A payable on death account (POD) is a quick, cost free vehicle to pass
on unlimited amounts of cash assets to a designated heir without going through
probate. Known as a poor man’s
trust, a POD is easy to set up using a bank provided form to designate a beneficiary.
In addition to being free and easy to setup, the depositor retains full
control of the assets in the account and can change the beneficiary or
change the status of the account at will.
It is equally easy for the beneficiary to take possession of assets in
a POD. Usually all that is required is to present the bank with a certified
death certificate along with proof of identification.
Cons of a POD
A POD does have some short comings and potential pitfalls.
While the funds in a POD avoid the expense and delay of probate court,
they remain subject to the claims of creditors and other heirs to the
estate. This is particularly problematic for the
executor of the estate, especially if the assets from the POD have already been dispersed.
Generally, a POD can have only one beneficiary, requiring separate accounts
to leave assets to multiple heirs.
The FDIC treats each account separately for insurance purposes allowing an individual depositor to be insured above the usual $250,000
A POD may not be used to bequeath assets to a minor, or to pass on ownership
of stocks, bonds, mutual funds or other non-cash assets.
Get More Info from an Estate & Probate Lawyer
For a more comprehensive look at Payable on Death Account pros and cons
and how a POD can fit into your estate planning
contact the Law Offices of James C. Shields; our attorneys are available to help insure that your estate is settled
in the manner in which you intended, easing your loved ones concerns during
the most difficult of times.