Also known as: pay-on-death · payable on death · POD
Written by attorneys · grounded in primary & secondary sources — see below
A beneficiary designation on a financial account directing that sums on deposit pass to one or more named beneficiaries upon the death of the last surviving party. The designation creates a nonprobate transfer that takes effect by contract with the financial institution rather than by will or intestacy. A beneficiary acquires no interest during the lifetime of any party.
Paul Peterson opened a checking account at a credit union and completed the form naming his sister Paige Porter as the pay-on-death beneficiary. After Paul died, the credit union paid the balance directly to Paige. The funds never entered probate because the designation controlled distribution by the terms of the account.
Pedro Pacheco deposited funds into a bank account titled in his name as trustee for his nephew Patrick Phan. Upon Pedro's death the bank released the balance to Patrick under the pay-on-death rules governing multiple-party accounts. The court confirmed that the arrangement functioned as a valid POD designation and did not require probate administration.
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Under the Uniform Probate Code, divorce revokes a POD designation to a former spouse unless the divorce decree or a separate contract expressly preserves it. The revocation occurs by operation of law at the time of divorce and treats the former spouse as having disclaimed the interest.
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A later will cannot revoke or alter a POD designation because the account contract requires the owner to follow the financial institution's specific procedure for changing the beneficiary. Courts generally enforce the account terms even when the will expresses a contrary intent.
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Sums on deposit in a single-party account without a POD designation or in a multiple-party account without right of survivorship pass as part of the decedent's probate estate under the beneficial-interest rules of the Uniform Probate Code.
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A beneficiary named in a POD designation acquires no right to the sums on deposit while any party to the account remains alive. The owner retains full control and may withdraw or change the designation at any time.
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…retirement account; and property acquired by right of survivorship, by a trust distribution, by bequest or inheritance or by a payable on death or a transfer on death arrangement under ch. 705. 3. With funds acquired in a manner provided in subd. 1. or 2. Wis. Stat. § 767.61(2)(a). If excluding this property "will create a…