Also known as: payable-on-death contract · payable-on-death contracts · POD contract · POD contracts · payable on death contract · payable on death contracts · POD · payable-on-death
Written by attorneys · grounded in primary & secondary sources — see below
A contractual arrangement that permits an account owner to designate one or more beneficiaries who receive the sums on deposit upon the owner's death. The designation creates no interest in the beneficiary during the owner's lifetime. Payment occurs directly to the beneficiary by operation of the account contract and bypasses probate administration.
Paige Porter opened a checking account at Pacific Bank and completed the form naming her niece Phuong Pham as the payable-on-death beneficiary. Paige retained full control and made withdrawals throughout her life. Upon Paige's death the bank paid the remaining balance directly to Phuong without probate proceedings.
Parker Phillips held a certificate of deposit and an annuity with payable-on-death designations to his adult children. After Parker died his surviving spouse Pamela Phillips claimed the accounts should be included in her elective share calculation. The court examined whether the POD designations placed the assets outside the probate estate for elective share purposes.
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No. The beneficiary holds no interest in the account during the owner's lifetime and the owner may change or revoke the designation at any time.
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The financial institution pays the sums on deposit directly to the designated beneficiary under the account contract. The funds do not become part of the decedent's probate estate.
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No. A later will cannot change a POD designation because the account contract controls the beneficiary designation and the designation is not part of the probate estate.
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Yes. A person convicted of the felonious and intentional killing of the account owner is barred from receiving the POD proceeds under the same principles that bar a slayer from other donative transfers.
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If neither spouse survives the other by the required 120 hours, each is deemed to have predeceased the other and the POD designation fails, causing the funds to pass through each spouse's estate.
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