Also known as: payment-on-death clause · payment on death clause · POD clause · pay-on-death clause · POD designation · pay-on-death
Written by attorneys · grounded in primary & secondary sources — see below
A contractual designation in a deposit account that directs payment of the account balance to a named beneficiary upon the death of the party or parties. The designation arises when an account is payable on request to one or more parties during life and to the beneficiary or beneficiaries at death, or when an account is titled in the name of one or more parties as trustee for one or more beneficiaries with no trust subject other than the sums on deposit.
Pamela Phillips opened a savings account at Local Bank titled Sunrise Inn LLC as trustee for Employee Emergency Fund. The account agreement allowed Pamela full withdrawal rights during her lifetime. Months later she signed the bank POD form naming her spouse Patrick Phan as beneficiary. At Pamela death the bank paid the balance directly to Patrick under the POD designation.
Karen Myers held a checking account, certificate of deposit, and annuity each carrying a POD designation to her daughters. After Karen death her surviving spouse Howard Myers sought to include those balances in his elective share calculation. The court examined whether the POD assets counted as part of the augmented estate subject to the surviving spouse election.
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A POD designation names a beneficiary who receives the balance only after the death of all parties and who holds no present withdrawal rights during life. A multiple-party account with right of survivorship gives each party a present right to request payment and automatic survivorship among the parties themselves.
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Yes when the only subject of the supposed trust is the sums on deposit and the trustee-beneficiary relationship is established solely by the account terms. The statute treats such trustee-form accounts as POD arrangements even without a separate trust instrument or additional assets.
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The later accepted modification controls the disposition at death because the terms of the account include any recorded changes to the beneficiary designation. The original trustee-form title yields to the updated POD card once the bank records the change.
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No. A beneficiary under a POD designation acquires no right to the sums on deposit during the lifetime of any party and holds only an expectancy that vests at the death of the last surviving party.
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