The Payable on Death Designation - An Essential Estate Planning Tool
Have you heard of the Payable on Death (POD) designation? A POD designation, also referred to by some financial institutions as a Transfer on Death (TOD) designation, is an estate planning tool that allows individuals to designate beneficiaries to receive certain assets directly upon their death, bypassing the probate process. This can be particularly helpful for assets like bank accounts, certificates of deposit (CDs), and other financial accounts.
Used as part of a comprehensive estate plan that is aligned with a person’s goals, the Payable on Death designation offers several benefits.
Probate Avoidance
Assets with a POD designation will pass directly to the named beneficiary upon the account holder's death, without being subject to probate. This can save time and money for the beneficiaries and help expedite the transfer of assets. You loved ones won’t have to wait months and months to be able to access the assets.
Easily Updated
If you decide that you want to change the beneficiary after you have already set up a POD designation, no problem. You can change it any time during your lifetime.
Simple Process
The process for the beneficiary to claim the assets is usually straightforward. The beneficiary only needs to provide a copy of the account holder's death certificate to the financial institution holding the account.
Limited Access
It's important to note that the named beneficiary does not have any rights to the account during the account holder's lifetime. The account holder retains full control and ownership of the account and can change the beneficiary designation if needed.
One Part of an Estate Plan
While the POD designation can be a valuable tool, it's important to consider the overall estate plan and how the POD designation fits into the broader picture. The best way to do that is to work with an experienced estate planning attorney who can help you identify your goals and then create a plan to achieve them.
Could the POD designation have a place in your estate plan? Kimbrough Law can help you find out. Give us a call at 706.850.6910 to schedule a confidential consultation.
