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. Once met, the beneficiary becomes the lawful owner of the bank account.
To many, this sounds simple. But, even more, it seems the perfect way to avoid probate.
But there are pitfalls, and these significant considerations should not be overlooked.
- Provides no asset protection for the beneficiary of the account
- Disqualification from government benefits in some cases
- Requires Guardianship if the beneficiary is a minor or disabled person
- POD designations often override your “big picture” intentions
Piecing together an “estate plan” on your own, or trying to cut corners, can cost your beneficiaries a lot of money, and hardship is not advisable.
Thoughtful planning includes sitting down with an experienced Attorney that takes the time to familiarize you with your family, wishes, financial landscape, and long-term vision.
We specialize in educating and helping you protect what you have for the people you love the most. Contact us to learn more about how we can help.