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What is a POD account, and how does it affect an estate?

On Behalf of | Jan 5, 2023 | Estate Administration & Probate |

If you are an estate administrator, you know that many financial assets are simply going to be listed in the will. For instance, the individual who passed away may have had a bank account with a significant balance, and they wanted it to be split up between their children. You have permission to access that bank account, withdraw the funds and then distribute them as intended.

However, you may find yourself in a situation where the person has a POD account as part of their estate. POD, in this case, stands for payable on death. What is this type of account and how is it different? What do you need to know? 

Such accounts transfer immediately

A POD account is one that has been set up so that it will instantly transfer from one person’s name into another’s. As soon as the first person dies, the second person is given complete control of the account. For instance, a father could list his oldest son in this capacity, and then the contents of that account pass directly to the son when the father passes away.

As an administrator, this makes things simple for you. The money has already been transferred and it is no longer in the elderly person’s estate. This means that you do not have to handle it at all. It may require little more than the person showing the financial institution a certificate of death to prove that they should take over the account.

You can see why it’s so important to know how different types of financial accounts are addressed by estate administrators and why you need to know about all of the steps to take.