Also known as: POD clauses · payable on death clause · payable on death clauses · POD · payable on death
Written by attorneys · grounded in primary & secondary sources — see below
A beneficiary designation in a deposit account that directs payment of the sums on deposit to one or more named beneficiaries upon the death of the last surviving party. The designation may appear in an account payable on request to one or more parties during life and to the beneficiary or beneficiaries at death, or in an account titled in trustee form when the only trust property consists of the sums on deposit.
Portia Price opens a savings account at Local Bank and signs the bank's standard form naming her daughter as the pay-on-death beneficiary. During her lifetime Portia retains the sole right to withdraw funds. Upon Portia's death the bank pays the remaining balance directly to the daughter without probate administration.
Pilar Pena holds a checking account, certificate of deposit, and annuity each carrying a pay-on-death designation to her adult children. After her death her surviving spouse claims the assets must be included in the elective share calculation. The court determines that the POD designations constitute valid nonprobate transfers that pass outside the probate estate.
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No. A beneficiary under a POD designation holds only an expectancy and acquires no present right to the sums on deposit while any party remains alive. The beneficiary's interest arises solely upon the death of the last surviving party.
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A POD designation names a beneficiary who takes only at death and is not a party with withdrawal rights during life. A multiple-party account with survivorship gives each party a present right to payment and automatic ownership by survivors upon one party's death.
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No. Under the Uniform Probate Code a POD designation cannot be changed by will. The account contract controls the method of revocation or amendment, and any attempt to override the designation by will is ineffective.
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The divorce may revoke the POD designation to a former spouse under the Uniform Probate Code's revocation-on-divorce statute. The funds then pass as part of the decedent's estate rather than to the former spouse.
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