If you are looking for ways to plan your estate while helping your family avoid a lengthy probate, a payable-on-death account may help. Payable-on-Death (POD) accounts allow the account holder to name a beneficiary. This beneficiary will inherit all account funds when the account holder passes away.
Using a pay-on-death account is one of the best ways to help your financial assets circumvent probate. Probate is the court process by which a Will-based estate or an estate without a Will is settled. This process can be lengthy and costly for your estate. This could rob your loved ones of some of their inheritance. Accounts that you make payable-on-death will pass unscathed from probate costs into the hands of your beneficiaries.
When an account is payable-on-death, the inheritor can take control of funds by presenting a copy of the decedent’s death certificate. If your spouse is your beneficiary he or she will have fast funds to cover your final expenses and pay for the daily expenses of your family.
Making an account payable-on-death is simple. First, check with your account institution to determine if they allow for such accounts. Then, fill out a beneficiary designation form. Whomever you name on this form will receive your funds. If you wish to leave POD funds to more than one person make sure to include all inheritors on your form. Your account will be split evenly between all beneficiaries, so you cannot use your form to dictate shares to each recipient.