Also known as: POD accounts · payable on death account · payable-on-death account · payable on death · POD · Totten trust
Written by attorneys · grounded in primary & secondary sources — see below
A bank or brokerage account that permits the owner to designate a beneficiary who receives the remaining funds upon the owner's death. The designation creates a direct transfer outside probate while the owner retains full control and ownership during life. A beneficiary acquires no interest until the owner's death.
Parker Phillips opens a brokerage account and names his sister Penelope Price as the POD beneficiary on the account form. Parker continues to withdraw and deposit funds freely during his lifetime. Upon Parker's death the brokerage pays the balance directly to Penelope without probate proceedings.
Nathan opens credit union accounts with POD designations naming his then-wife Connie. After their divorce the decree divides marital property but does not mention the accounts. Nathan dies ten years later without changing the designations. Laura, the residuary beneficiary under Nathan's will, claims the funds pass to her because the divorce revoked the designations.
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No. The beneficiary acquires no interest until the owner's death. The owner may withdraw all funds, change the beneficiary, or close the account at any time.
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No. A later will cannot alter a POD designation. The account terms control the beneficiary, and any attempt to revoke by will is ineffective.
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Under the Uniform Probate Code, divorce revokes the POD designation to a former spouse unless the divorce decree expressly preserves it. The funds then pass as part of the owner's estate.
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Yes. The funds transfer directly to the beneficiary by operation of the account contract and never become part of the probate estate.
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…treasurer, in a letter to Rood’s attorney, describes that account as “a single ownership account in the name of Dora Shaffer, payable on death to Michael Newberg.” Moreover, the account contained approximately $59,000 when it was opened, but by the time of Shaffer’s death it had increased to over $85,000. This stands in contrast…