A payable on death (POD) account is a seemingly simple way to transfer assets to an heir or beneficiary without the need for California probate. While the promise of a POD account cannot be undersold, they only serve their intended purpose when they are part of a more holistic estate planThe pros and cons of a POD account

The Advantages of POD Accounts

A POD account is a special type of bank account that allows the account owner to designate one or more beneficiaries to receive the funds left in the account when its original owner dies.

The Benefits of Establishing a California POD Account

  • They are usually easy to set up and administer.
  • The account owner is entitled to the full use and access of the account funds while they are still alive.
  • The beneficiaries can receive the proceeds without any need for probate.

However, an estate plan that is too dependent on PODs could create unnecessary trouble for account owners and heirs.

Mistakes to Avoid With PODs

While POD accounts are an easy, inexpensive way to avoid probate, they must be handled with care. It’s important to speak with an estate planning attorney before you establish one.

Why You Should Talk With a CA Estate Planning Attorney About POD Accounts

  • You could name the wrong beneficiary.
  • You could fail to update a POD beneficiary who you wished to disinherit.
  • You could leave too much money to one child who agrees to share it with their siblings but finds themselves confronted by unexpected estate or gift taxes.
  • You could leave too much money to one child who agrees to share it with their siblings but decides they do not wish to distribute the funds after you pass away.
  • You could name an heir who dies before you, exposing the POD to probate if you do not promptly update the beneficiary designation.
  • You could name a beneficiary who does not reach the age of majority before you die, forcing your executor to initiate guardianship and probate proceedings to disburse the account funds.

Contact a CA Attorney to Avoid POD Account Mistakes

POD accounts have distinct advantages, but they have to be handled with car to avoid common mistakes. The Law Firm of Kavesh, Minor & Otis, Inc. has decades of experience helping Californians from all walks of life plan their estates and cement their legacies. Please send us a message online, or call us at 1-800-756-5596 to schedule your free consultation.

 

Philip J. Kavesh
Nationally recognized attorney helping clients with customized estate planning guidance for over 40 years.
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