Payable on Death (POD) accounts are a popular way to transfer assets to beneficiaries outside of probate. They are a simple and cost-effective way to ensure that your money goes to the people you want it to after you pass away. However, there are some things you need to know about POD accounts before you make them a part of your estate plan.
Our estate planning lawyers will provide you with all the information you need to understand POD accounts and how they can benefit you and your loved ones.
What is a Payable on Death Account?
A POD account is a type of bank account that allows you to designate one or more beneficiaries to receive the funds in the account after you pass away. The beneficiaries will receive the funds without having to go through probate, which can save time and money.
How to Set Up a POD Account
Setting up a POD account is a simple process. You will need to fill out a form provided by your bank, indicating the beneficiary or beneficiaries you want to designate. It's important to keep your beneficiary designations up to date, especially if your life circumstances change.
Pros and Cons of Payable on Death Accounts
POD accounts have many benefits, such as avoiding probate, saving time and money, and providing a clear distribution of assets. However, there are also some drawbacks to consider, such as the lack of flexibility in changing beneficiaries and the potential for disputes among beneficiaries.
How to Avoid Common Mistakes
There are several common mistakes people make when setting up POD accounts, such as failing to update beneficiary designations, forgetting to consider tax implications, and not taking into account the potential for future family disputes. We will provide you with tips on how to avoid these mistakes and ensure that your POD account is set up correctly.
When to Consult with an Estate Planning Attorney
While POD accounts are a simple way to transfer assets, they may not be suitable for everyone. It's important to consult with an estate planning attorney to determine if a POD account is the best option for your estate plan. An attorney can help you evaluate your options and ensure that your estate plan meets your goals.
In conclusion, understanding payable on death accounts is an essential part of estate planning. By setting up a POD account, you can ensure that your assets go to the people you want them to without having to go through probate. However, it's important to understand the pros and cons of POD accounts and avoid common mistakes. If you're considering setting up a POD account, consult with an estate planning attorney to ensure that it's the best option for your estate plan.
If you have questions payable on death accounts, then give us a call today at (800) 828-7854 to speak with a Metro West Boston estate planning lawyer at Marsden Law P.C. about your situation.