A common strategy to avoid probate is making a POD (payable on death) designation on your bank accounts. A POD designation assigns a beneficiary to bank accounts in the event of the account holder’s death.
At the time of death, a POD designated beneficiary must produce a death certificate for the original account holder to complete the transfer from the original account owner to their own name.
To many, this sounds simple. Even more, it seems like the perfect way to avoid probate.
But there are pitfalls, and these major considerations should not be overlooked:
- Provides no asset protection for the beneficiary of the account
- Can disqualify the recipient from their government benefits in some cases
- Requires a Guardianship if a beneficiary is a minor or disabled
- POD designations often override your “big picture” intentions
Piecing together an estate plan on your own or trying to cut corners can end up costing your beneficiaries a lot of money and hardship in the long run.
Thoughtful estate planning can be done easily with our office. We take the time to get familiar with your family, your wishes, your financial landscape, and your long-term vision. Contact us to get started today.