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Faizan
While funds from bank payable-on-death accounts are considered part of an estate's assets, they don't go through the probate process. That's the formal process in which a deceased person's assets are transferred to heirs, starting with the filing of the late person's will in a probate court. While beneficiaries can generally access POD inherited funds much faster, funds in these accounts are still subject to any federal or state estate or inheritance tax laws.
Payable-on-Death Accounts
Similar to transfer-on-death accounts for stocks and bonds, the owner of a payable-on-death bank account designates beneficiaries who receive the account's proceeds once he dies. Since the account doesn't go through the probate process, the beneficiaries can receive their funds by submitting identification, filling out specific bank forms and providing the institution with a certified copy of the account owner's death certificate. A POD beneficiary can't access the money while the account owner is alive, and the owner can change the named beneficiaries during his lifetime.
POD Considerations
An account designated as a POD overrides a will. If your will states that one beneficiary receives all or part of your bank accounts, but you have a POD account set up for a second beneficiary, the first beneficiary is out of luck.
Payable-on-Death Accounts
Similar to transfer-on-death accounts for stocks and bonds, the owner of a payable-on-death bank account designates beneficiaries who receive the account's proceeds once he dies. Since the account doesn't go through the probate process, the beneficiaries can receive their funds by submitting identification, filling out specific bank forms and providing the institution with a certified copy of the account owner's death certificate. A POD beneficiary can't access the money while the account owner is alive, and the owner can change the named beneficiaries during his lifetime.
POD Considerations
An account designated as a POD overrides a will. If your will states that one beneficiary receives all or part of your bank accounts, but you have a POD account set up for a second beneficiary, the first beneficiary is out of luck.
Posted in: Estate Laws
