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.