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TOD and POD Provisions Can Help Your Heirs Inherit Assets from You with Less Hassle

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In a will, you specify which assets will go to which of your family members or other heirs upon your death, but wouldn’t it be nice if the assets specified this for themselves?  In fact, in some instances, they do.  Transfer on death (TOD) and payable on death (POD) provisions can often keep assets from going through probate.  To find out more about how POD and TOD provisions can make it possible for your heirs to inherit property from you without probate, and how to make that process happen, contact a Florida estate planning lawyer.

What Do TOD and POD Mean in Estate Planning?

In Florida law, the term POD is usually used when talking about bank accounts, while TOD is used in reference to investment accounts.  In both cases, you name the beneficiary when you open the account or at any point afterward, as long as you are healthy enough not to be legally declared incapacitated.  The POD provision allows the account to go straight into the beneficiary’s position upon your death, without going through probate.

The beneficiary does not have access to the account while the original owner is alive.  In fact, beneficiaries of POD provisions on bank accounts may not even know that they have been designated until after the owner dies, as the financial institution does not require the beneficiary to sign anything or be notified, when they are initially designated.  It is possible for a married couple who jointly own a bank account to add a POD provision that will transfer the account to another beneficiary, but that beneficiary does not get the account until after both spouses die.

The following types of accounts are eligible for POD provisions:

  • Checking accounts
  • Savings accounts
  • Certificates of deposit (CDs)
  • Money market accounts

A Complex Case of Multiple Beneficiaries

It is possible to name more than one person as a POD beneficiary.  For example, let’s assume that Agatha, who has never married or had children, names her five siblings as POD beneficiaries to receive equal shares of the money in her savings account.  Many years later, when Agatha dies, only three of her siblings are still alive, but Agatha has never updated the list of beneficiaries. To determine what happens in this situation, you must look at the institution’s preprinted beneficiary form.  The preprinted verbiage on the form may provide that the three surviving siblings are to split the money equally, without probate.  Some forms may allow the account owner, when specifying the beneficiaries  to also state an alternate, who would get the share of the predeceased beneficiary.  Some forms may provide that the share of the deceased beneficiary will pass according to law, or say nothing at all.

Meanwhile, Bruno named his sister as the POD beneficiary of his bank account.  She predeceases him, and he does not name a new beneficiary before he dies.  Again, you must look at the institution’s form to see if it specifies what will happen.  If the form does not contain any direction, the bank account must go to probate.

Contact an Attorney Today for Help

An estate planning lawyer can help you keep some or all of your assets out of probate, thereby saving your relatives time and money.  Contact Clearwater estate planning lawyer William Rambaum to discuss your questions.

https://www.rambaumlaw.com/getting-started-on-estate-planning-important-questions-to-ask-yourself-and-your-attorney/

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