What Is a Payable on Death Account?

You might discover in the process of administering someone else’s estate or in structuring your own estate the existence of a payable on death account. A POD account is an arrangement between a credit union or bank and a client that designates the beneficiaries who will receive all of the assets belonging to that client.

This immediate asset transfer is triggered when the client passes away. Any person with a certificate of deposit at a bank can determine a beneficiary who is eligible to inherit any money in the account after his or her death. A named beneficiary on such a bank account will be referred to as the payable on death account.

One of the primary reasons that people opt for payable on death accounts in Virginia is to keep this money inside a bank account outside of probate court in the event that the owner of the account suddenly passes away.

Designating a beneficiary is an easy and free service that allows for the transfer of savings bond, savings accounts, checking accounts, security deposits and other deposit certificates. In order to do this, you must visit your credit union or bank to discuss it.

Your primary responsibility here is to notify the bank of who the beneficiary should be. A completed form filed with the bank will give that financial institution the right authorization to convert the account to a payable on death.

The beneficiary named in a POD account is not eligible to receive any of the money in the account while the account holder is still alive. However, when the owner of the account passes away, the beneficiary becomes the automatic owner of the account allowing this to bypass the traditional estate process. Want to create other tools for estate planning? Schedule time to speak with a VA Beach estate planning attorney.



Do I Really Need Life Insurance Beneficiaries?

So you already have a life insurance policy in place as part of your estate plan- smart move. As part of your application and final policy approval process the company probably gave you a beneficiary form.

This form is extremely important and should not be ignored. Even if you write in your will that your life insurance policy will be given to a certain family member, you should know that the forms filed with the insurance company for your beneficiaries take precedence when your estate is administered.

This is also because your estate passes outside of the traditional probate process. These forms are key for telling the insurance company who gets all or part of your policy proceeds, so they should be filled out and then reviewed each year as well.

If you’re new to life insurance as part of your overall estate plan, you are not limited to just one beneficiary. You can list both a primary and contingent beneficiary so that there’s a backup, and you can split the proceeds of the policy between different parties so long as you allocate these percentages properly on the beneficiary forms.

Most people use life insurance policies to help when there is a need for general living expenses or for a big expense like paying off a mortgage or for a child’s college tuition. Since a will can get tied up in probate for a long period of time, the life insurance policy can help your family get back on their feet sooner rather than later.

In conjunction with a will, a trust, and other estate planning tools, you’re empowered to cover a lot of bases with your Virginia estate plan. If you have questions about the process or need help creating these documents, a Virginia estate planning lawyer can help you create a comprehensive and unique strategy.

What You Need to Know About Using Minors as Primary Beneficiaries

Estate planning issues that have to do with children can be extremely complex. Minor children are usually only able to own a small amount of property directly in their own names.

This is why many parents choose to use tools, such as a trust, to pass on property to their children through the management of a trustee. The amount that minor children can accept outright in their own name varies from one state to another, so it’s important to discuss with your individual estate planning attorney what to expect.

Any property that belongs to a minor beyond that amount has to be legally supervised and controlled by an adult. If you are considering leaving behind a substantial gift to a minor, you should select an adult to be responsible for it.

You have two major options when preparing to pass on property beyond the allowable amount. These include:

• Leaving the gift to the child and naming an adult able to be responsible for supervising it. The adult can be one of the parents of the child but does not have to be directly.
• Leave the gift to the other parent who is eligible to use it for the child’s benefit. If the parents can cooperate and get along with another and can trust that any money will be managed well, this is usually the simplest way to address the matter.

For more helpful comprehensive estate planning issues having to do with children, schedule a consultation with a lawyer today.