Most of us understand beneficiary designations when it comes to life insurance accounts, retirement benefits, even Transfer on Death Deeds. And, most may even understand how those assets do not need to pass through a probate process because of that beneficiary designation. But, many people do not know that you can create a “beneficiary” for your bank accounts by creating a POD designation.
POD stands for “Payable-On-Death” and allows someone to designate a beneficiary for their bank account which, like other beneficiary designations, will not need to pass through probate for access to those funds, but rather that account becomes the property of the beneficiary upon the account-holder’s death. This is NOT for joint accounts – joint accounts become the property of the surviving joint owner upon a person’s death. So, if you already have the name of the person to whom you would like the account to belong upon your death listed on a joint account, it will automatically belong to that person, without you doing a thing. But, if your name is the only name on the account and you would like someone to have more immediate access to it upon your death (not having to wait for the probate process to transfer title), you can put someone else’s name on the account as a POD beneficiary, and that person will own the account upon your death.
Here’s how it works:
- Contact your bank – find out how they like to deal with POD designations and fill out/sign what is necessary. It’s quick and easy. Each bank is different, however, so if you have multiple accounts for which you wish to create a POD beneficiary and they’re in different institutions, you may be looking at different procedures and/or forms.
- The bank will keep record of this designation and, upon your death, the person who is designated as the POD beneficiary will be allowed access to those funds, having produced required proof of your death (usually a death certificate), as required by that particular bank. There is sometimes a brief waiting period.
- ** This is the law in Minnesota, so if your bank says they don’t know what you’re talking about or if they say they don’t do that, they’re wrong. You can do one of two things if this happens: Either 1) ask to speak to a manager (sometimes the tellers don’t know about it), or 2) bring in a copy of the law that says you can create this POD beneficiary (Minnesota Multiparty Accounts Act – Minn. Stat. §§ 524.6-201 to 524.6-214). You can cut and paste this into the menu bar and print off to take with you.
Here’s who should consider a POD account designation:
If you pay all the bills, if you are the “keeper of the on-hand cash,” if you and your spouse/partner do not have joint accounts, if you handle all the cash transactions for yourself and someone else, if you know someone would be caught with no cash on hand for an extended period of time if you pass away unexpectedly, or you just know who you want to have the cash in your account upon your death and you don’t want them to have to wait to have access to those funds – you may wish to consider this easy way to allow a relatively immediate access to those who would need to use this account after your death. Reminder: this POD designation does NOT create a joint account. It only effects access to the funds after you have passed away and not before.This blog is written by Bridget-Michaele Reischl, Attorney DECORO LAW OFFICE, PLLC www.decorolaw.com
ALL READERS: This blog is not, nor shall it be deemed to be, legal advice or counsel. This blog does not create an attorney-client relationship with any reader. It is designed to encourage thoughtful consideration of important legal issues with the expectation that readers will seek professional advice from a licensed attorney.Contact Bridget-Michaele Reischl at: DECORO LAW OFFICE, PLLC 6 West 5th Street, Suite 800-D Saint Paul, MN 55102 (651)-321-3058