Probate is a necessary legal process that ensures the effective and complete transfer of a decedent’s assets to beneficiaries. It can, however, be cumbersome and take time to complete. In order to avoid the delays and financial costs of probate, some Greenwich residents look for asset transfer strategies that will keep their wealth out of probate when the pass on.
Payable on death accounts are one option for those seeking probate-avoidance options. This post does not provide any financial or legal advice, and all questions about payable on death accounts should be directed to readers’ trusted and knowledgeable estate planning attorneys.
What is a payable on death (POD) account?
Payable on death accounts can be many different types of financial accounts. They can be savings or checking accounts, money market accounts or even savings bonds. Generally these types of financial assets would go through probate in order to be distributed to beneficiaries, but giving them POD status avoids this. Rather, converting a regular account into a POD account allows an account owner to name a beneficiary who directly becomes the owner of the account property at the time of the original owner’s death.
How to convert an account into a POD account
It is important that individuals work with their financial and legal advisors before attempting to designate their accounts as POD. However, once the account is designated as such, it is relatively easy for a beneficiary to claim it. They may need a copy of the decedent’s death certificate and other identifying information. More than one beneficiary can be named for a POD account, and if no beneficiaries survive the death of the decedent then the account wealth will pass through probate.
POD accounts can be valuable estate planning tools for individuals who wish to effectuate the smooth transition of their assets to their beneficiaries. Those interest in learning more about them can discuss them with their estate planning lawyers.