A Smart Thing to do to Your Bank Account: "Payable on Death" Assignment

Throughout the week, we've addressed some documents that everyone should have, and here's one more thing that I (Rob) was recently made aware of. You can assign a beneficiary to your bank accounts (doesn't cost anything!), should something happen to you. WHY DO THAT? - To keep the bank accounts out of probate. (which ties things up for many months).

WHAT IS "ASSIGNING POD" TO YOUR BANK ACCOUNT?- 
With a payable on death account or paid on death account, you name a beneficiary who gets the account when you die—no probate, no hassle. The person you name has no rights to the money until you die, so you can spend it all or change the beneficiary. When you die, the beneficiary simply needs to show the financial institution your death certificate and his or her identification, and the money is theirs. This works for bank accounts, certificates of deposit and even sizeable brokerage accounts. SOURCE: FORBES

Pros and Cons of Making Your bank account "POD" to someone

For instance, if you're married, you would name your spouse. If you're single you would name the person you would like to handle your estate (always good to name the person you picked as Executor to your estate to prevent problems). 


WHAT ABOUT COMPLICATIONS? - Forbes says that if the POD order on bank accounts goes against the will, then it can cause problems.

BIG BENEFIT -  A small payable on death account (your checking account, for example) can help make sure funds are available immediately for your executor or personal representative to pay for funeral expenses or other immediate cash needs during the estate administration period.

IF YOU HAVE AN ELDERLY PARENT- You should ask them to consider doing what my mom did.
In the case of my mom who passed in December 2013, as my mom aged, my younger brother's name was actually added on the account instead of POD. That made it easier for him as the appointed Executor of her estate to use her checking account to pay the funeral expenses, remaining utility bills, etc.
 

On a POD bank account you retain full ownership of the account until you die, and the Federal Reserve recognizes POD accounts as revocable trusts because you can add or remove beneficiaries at any time.

Read more : http://www.ehow.com/info_8379701_payableondeath-bank-account-vs-trust.html

On a POD bank account you retain full ownership of the account until you die, and the Federal Reserve recognizes POD accounts as revocable trusts because you can add or remove beneficiaries at any time.

Read more : http://www.ehow.com/info_8379701_payableondeath-bank-account-vs-trust.html