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  • Daniel Rodriguez

Payable on Death (POD) Accounts in California —One of the Best Kept Secrets in Estate Planning

Most accounts, i.e., savings, checking, brokerage, etc., authorize the designation of one or more payable on death beneficiaries. This means that upon the death of the owner of the account(s), the designated beneficiaries receive direct payment of the account balance after a brief waiting period by the financial institution without the need to obtain a probate court order or any other process that might involve having to hire a Roseville estate planning attorney. Thus, people who do not own real property and whose assets consist of funds in accounts with POD beneficiaries can avoid probate, and the time and expense of having a revocable living trust.

How Is a POD Designation Established?

Simply visit your financial institutions and request that you want a POD designation on your accounts. You will be presented with a form to complete, which will have you identify the persons whom you want to receive the account balances upon your death. Be sure to include all information on the form: name, address, driver’s license numbers, and any other information requested. We also recommend that you inform the persons you have designated as POD beneficiaries so that they are aware of their future interest in the account(s).

How Do My POD Beneficiaries Receive the Funds?

Upon your death, your POD beneficiaries will need to obtain a certified death certificate. The death certificate must be presented to the financial institution along with proper identification. The funds will then be released to the POD beneficiary. There is usually a 40-day waiting period to ensure that there are no outstanding debits on the accounts.

Is There any Risk to My Accounts if I Designate a POD Beneficiary?

No. The POD beneficiaries are not owners or co-owners on the account(s), and they have no right of access to the account(s) during your lifetime.

Can I Change My POD Beneficiary(ies)?

Yes. Simply contact your financial institution and they will assist you with completing a new or revised POD document.

In summary, use of a POD beneficiary designation may be a safe and secure method of passing on your legacy to loved ones without having to pay for a living trust or go through probate. The only drawback is that POD beneficiary designations do not work for real property. If you own real property valued in excess of $150,000 in California, a revocable living trust is recommended to avoid probate.

Unfortunately, most financial institutions do not educate their customers about the availability of POD designations on accounts. Thus, it is one of the best kept secrets in estate planning.

Rely on an Experienced Roseville Estate Planning Attorney of NewPoint Law Group, LLP

To discuss your tax or estate planning legal matter, call the experienced attorneys of the New Point Law Group at 800-358-0305 or contact us online today.

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