Pay-on-Death Designations

Pay-on-death designations are a simple way to move your liquid assets to your beneficiaries without having to go through the probate process.

Bequeathing your estate involves a lot of personal and financial decisions. You’ll have to decide who receives your tangible and intangible property, and the terms that come along with that inheritance.

However, you must also plan on who receives your “liquid” estate – bank accounts, government held accounts, IRA’s, and any other financial interests you hold.

What are Pay-on-Death designations (POD)?

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A POD designation exists when you name beneficiaries to inherit your existing financial accounts.

Your POD designates your beneficiaries of those particular accounts only.

It does not cover physical property, nor does it establish POD beneficiaries as beneficiaries of your estate.

How do I establish a Pay-on-Death designation (POD)?

Establishing a POD account is simple. First, name your beneficiaries on the ownership documents or other bank account registration.

Most banks will have a form where you can select  POD designation and list beneficiaries.

Beneficiaries are listed to inherit full access to your accounts at the time of your death.

Then, keep a copy of your original paperwork establishing their inheritance of the accounts.

You are not recommended to keep your POD information in a safe deposit box or other privatized holding.

Your beneficiaries will need proof of their inheritance in order to access your accounts.

How do Pay-on-Death designations (POD) work?

Once you have established a POD designated account, that’s it.

You retain control of your bank account with full accessibility during your lifetime.

You have the ability to change your beneficiaries, or cancel the designation altogether.

Since you are still considered the owner of those accounts, your beneficiaries do not receive access until after your death.

Pay-on-Death Designation FAQ

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How do Pay-on-Death designations (POD) avoid probate?

Your POD designations are established in order to provide your beneficiaries with “ready-cash” at your time of death.

Therefore, your account assets are free of probate.

The POD designation passes your account assets directly to your designated beneficiaries.

The transfer is separate from your will or trust estate assets, which excludes it from probate proceedings.

Your beneficiaries are exempt from paying estate or gift taxes on the POD designated account transfers.

However, they are subject to the individual fees of the bank or financial institution managing your POD designated accounts.

Can I share a Pay-on-Death designated (POD) account with my spouse?

Your POD account can also have multiple owners.

For example, an account established by you and your spouse grants both of you access to that account during your lifetimes.

However, you both name the beneficiaries that will inherit your account.

Multiple beneficiaries is a common result of shared POD accounts.

However, your beneficiaries only receive access to the account once both you and your spouse are deceased.

How many beneficiaries can my Pay-on-Death designated (POD) accounts name?

The number of beneficiaries should be determined by the value of your POD designated accounts.

If you are leaving a substantial amount of money to your beneficiaries, naming multiple beneficiaries may be the fairest way of distributing your assets.

However, if your POD designated accounts are not a substantial amount, it might be wiser to designate fewer beneficiaries.

This way, you are distributing larger amounts to a smaller group, rather than smaller amounts to a larger group.

Either way, the number of beneficiaries you choose to inherit your POD designated accounts are for you to decide.

How are my Pay-on-Death designated (POD) account assets distributed?

You designate who inherits your account.

Therefore, you also have the ability to designate how much of your account your beneficiaries receive.

You can divide your POD designated account by amount or percentage to your beneficiaries.

Your designation is extremely difficult to for your beneficiaries to dispute, as it is not subject to probate and is not considered as part of your overall estate.

What if my beneficiary dies before I do?

You are recommended to name alternate beneficiaries as well as primary beneficiaries on all of your POD designated accounts.

In the event that your primary beneficiary is unable to receive their inheritance, it passes on to your alternate or remaining co-beneficiaries.

However, if your primary beneficiary dies and you name no alternate beneficiaries, your POD designation is cancelled upon your death.

Instead, your account assets are assumed by your overall estate, which then become subject to probate.


Pay-on-death designations are a wise method of protecting your personal accounts outside of your estate.

You avoid probate, and ensure that your accounts are directly passed on to your beneficiaries during a time that may present a greater financial need.

To ensure you are covering all of the assets of your estate, schedule a consultation with our estate planning attorney.

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