Switch to ADA Accessible Theme
Close Menu
Washington DC Business Lawyer
~ Washington DC Business Law Attorneys ~

Should You Open a Payable on Death Bank Account?


A payable on death (POD) bank account is one that is earmarked, from the beginning, to stay out of probate.  “Payable on death” means that, immediately upon the death of the original owner, the beneficiary becomes the new owner of the account and all the money in it.  Does it sound too good to be true?  If POD bank accounts are an option, then why do so many assets still end up in probate?  The fact is that POD bank accounts are not for everyone.  They can be very helpful in certain circumstances.  These are some situations where it is or is not advisable to use a POD account.  If you want to find out more about the role that POD accounts can play in your estate planning strategy, contact a Washington DC estate planning lawyer.

POD Accounts at a Glance

The POD option is not available for all financial products, only for checking accounts, savings accounts, and CDs. The money in a POD account reverts to the beneficiary as soon as the owner dies, but not a minute before.  If you want a bank account to be payable on death to a beneficiary, you must specify this when you open the account; you cannot change an account to POD after the fact.  You can, however, update the list of beneficiaries.  For example, if you name your two children as beneficiaries when you open the account, but your third child is born after you open the account, you can add him or her as a beneficiary.  The beneficiaries will get the money even if the original owner’s will or living trust states otherwise.

Times When You Might Want a POD Account

  • If you do not have a life insurance policy, the money from a POD account can help your relatives pay for burial expenses. It can even help them with the costs of probate, if you have other assets going to probate.
  • You were thinking about opening a living trust, but it seemed like too much work and expense. A POD account is simpler and less expensive.
  • You want to avoid probate, but you don’t want a living trust, specifically because you do not want the beneficiaries to have any right to the money while you are alive.

Times When A Living Trust Is Better Than a POD Account

  • You want the beneficiaries to have access to the money while you are alive.
  • You want to be able to help your family financially if you become too ill to make financial decisions.
  • The most important assets you want to keep out of probate are real estate properties or investment accounts. The POD rules cannot help you with these, although transfer on death (TOD) provisions exist for investment accounts.

Let Us Help You Today

POD accounts might be just what you need to enable your family members to inherit your money without probate.  Contact the Washington DC estate planning lawyers at Tobin O’Connor Concino P.C. for assistance with your case.


Facebook Twitter LinkedIn