A Look At Pay On Death Accounts

Estate planning can sound like a complicated legal matter, and in some cases rather complex legal instruments are needed to avoid asset erosion, protect assets, and enable a smooth and efficient transfer. But sometimes there are also more simple and straightforward ways to get assets into the hands of your loved ones after you pass away. An estate planning attorney can coordinate the various asset transfer vehicles that you can use to make the transfers as easy as possible while minimizing expenses.

One way to transfer assets to your heirs after you pass away is pay on death or transfer on death accounts. These types of accounts are offered by most banks and many brokerages, and they are very appealing to many people. You simply fund the account and name a beneficiary who would assume ownership of assets in the account after your passing. In some cases you can name multiple beneficiaries, but some financial institutions have rules requiring that the beneficiaries receive equal shares of the assets remaining in the account.

Pay on death accounts provide the holder with ease and flexibility that is very appealing to many individuals. You can make deposits and withdrawals as you see fit like you would with any bank account, and you have exclusive access to the funds while you’re still alive. If you want to change the beneficiaries, you’re free to do so; in fact, you could close the account entirely if that’s what you want to do at some point in time.

In addition to this flexibility pay on death accounts allow for asset transfers outside of the process of probate, and this makes for a quick and efficient transfer.

In some cases, this is an efficient way to pass on assets after your death, but this method can also present problems because it is not available for all assets and is not appropriate for all beneficiaries.  If you have questions about whether this method might be appropriate for you, talk with an experienced estate planning attorney.