You may have heard the terms Payable on Death (POD) and Transfer on Death (TOD), but do you understand their importance? When should each be used? Do you need a POD? An experienced Estate Planning Attorney can answer these and many other questions.
What is a Payable On Death?
A Payable On Death (POD) is a legal document that is utilized to transfer money in your bank accounts, money market accounts, and certificate of deposits to a beneficiary upon your death. Having a POD in place bypasses the probate courts by moving the money into the desired person’s account instead of waiting for the Will to be read and assets distributed.
- A Payable On Death account avoids the probate courts and quickly transfers the accounts to your beneficiary, saving everyone time and money.
- If there is a conflict between what is listed in the Will or Trust and what is stated in a POD, the Payable On Death designation will generally win. The money will automatically be transferred to the POD beneficiary. But again, working with an experienced Estate Planning Attorney can sort this out for you and make sure your intentions are documented.
Why You May Choose a Payable On Death
The main reason for establishing a Payable On Death is the ease and efficiency of transferring your assets after you pass. Having your estate go through Florida probate court can be a lengthy and expensive process for your heirs.
- You pass away
- Reading of the Last Will and Testament and appointment of a personal representative who will handle the process
- Give notice to all creditors
- Resolve all estate claims
- Distribute assets to beneficiaries
For each step listed above, the circuit court supervises the proceedings and reviews all mandatory reports filed by the personal representative. Even a simple estate can take up to 6 months to settle – incurring administrative expenses and attorney fees for each step.
Difference Between a Transfer On Death and a Payable On Death
The main difference between a TOD and POD is the assets in which each is used.
- A Transfer On Death is generally established for stocks, bonds, brokerage accounts and retirement accounts.
- A Payable On Death is generally established for bank and money market accounts and Certificate of Deposits (CDs).
Benefits of A Payable On Death Account
Estate Planning Attorneys can tell you exactly why a POD may be best for you, but here are some benefits to know:
- Simple to establish
Most financial institutions have a form that you and your Estate Planning Attorney can fill out and set up your Payable on Death.
- No Charge
There are no fees for you to open a Payable On Death on your accounts, and there is no fee for your beneficiary to access the money upon your death.
- It’s Easy
Since Payable On Death designations do not have to go through probate courts, the POD is a quick and easy way to bequest your finances to your beneficiaries.
- No Limit
There is no limit to the amount of funds in the accounts payable to your beneficiaries.
Why You Need an Experienced Florida Estate Planning Attorney’s Help
Estate Planning sounds like something only for the rich and famous, but that isn’t true. We understand that you want to take care of your loved ones after you pass, and we can customize an Estate Plan specific to you.
It can be confusing and hard to understand all the Florida laws concerning a Will, a Trust, Transfer On Death and Payable On Death rules and requirements. An experienced South Florida Estate Planning Attorney is someone who understands your assets and your wishes. They will help with your Estate Plan to ensure everything meets your expectations.
Talk To a South Florida Estate Planning Attorney
Meeting with an experienced Estate Planning Attorney will ensure that you have an Estate Plan specific to you and your needs based on the most efficient way to distribute your assets after your death.
We Are Your South Florida Estate Planning Attorney
At Siegel Law Group, we understand that protecting your loved ones after you pass is of the utmost importance, and we are here to help with your Estate Planning Attorney needs. Call us today for a free consultation at (561) 955-8515, or contact us through our website for more information.