When Should I Use Payable-On-Death Account?

When Should I Use Payable-On-Death Account?

You will need to consult with your estate attorney, however, to make sure this kind of plan doesn’t conflict with your broader estate plan. For example, you might change your mind about who gets the money in that account. But you forget to change the paperwork at the bank. Regardless of what’s in the will, the courts may decide that the payable-on-death paperwork remains valid; letting the will address all other assets. In fact, that’s how a payable-on-death account is intended to operate.

Don’t try to distribute large sums of money with this method. There are plenty of legal, tax-free, and probate-free ways of distributing your assets through an attorney-created estate plan. Payable-on-death accounts are best used to pass along smaller amounts of money to help close out your estate. Final bills, funeral expenses, and travel expenses for family are great ways to use the funds from a payable-on-death account.

Sometimes the benefactor assumes that the beneficiary will redistribute the money to other family members. But money fuels greed, and the beneficiary of a payable-on-death account has every legal right to keep all the money.

Estate lawyers have countless legal tools to help distribute your estate exactly as you want. Payable-on-death accounts are just one option. Let your lawyer determine the best way to use it along with all the other estate planning choices.