A: Payable on Death (POD) is a designation that allows an individual to name a beneficiary to receive their assets upon their death without going through probate.
Q: What types of assets can be designated as POD?
A: Most financial assets can be designated as POD, including bank accounts, certificates of deposit (CDs), and brokerage accounts. Some states also allow real estate to be designated as POD.
Q: How does a POD designation work?
A: When an account owner designates a beneficiary as POD, the beneficiary does not have any access to the account while the owner is alive. Upon the owner’s death, the beneficiary simply needs to provide proof of death and identification to claim the assets.
Q: What are the benefits of using POD?
A: The main benefit of using POD is that it allows assets to pass directly to the beneficiary without going through probate. This can save time, money, and potentially avoid legal disputes.
Q: Can a POD designation be changed?
A: Yes, a POD designation can be changed at any time as long as the account owner is mentally competent to do so.
Q: What happens if the beneficiary predeceases the account owner?
A: If the beneficiary predeceases the account owner, the account owner should update their POD designation to name a new beneficiary. If no new beneficiary is named, the assets will likely go through probate.
Q: Can multiple beneficiaries be named for one POD account?
A: Yes, multiple beneficiaries can be named for one POD account. The account owner can designate the percentage of the account that each beneficiary will receive.
Q: Do I need a lawyer to set up a POD designation?
A: No, you do not need a lawyer to set up a POD designation. Most financial institutions provide the necessary forms to designate a beneficiary as POD.