There are so-called “simple solutions” that some people buy into when it comes to estate planning. One of them involves the creation of something called a POD account.
What Is a POD Account in Charlotte North Carolina?
A POD account is a bank account or a brokerage account that has a beneficiary. The acronym POD stands for “payable on death.” These accounts are alternately referred to as transfer on death accounts or TOD accounts.
While you are alive, the beneficiary that you select does not have any access to the funds that you have placed into the account. At the time of your death, the beneficiary that you added to the account would assume ownership of the assets that are in the account.
This can sound like a smooth transition. In addition, the transfer of the assets would not be subject to the probate process. Probate is often avoided because it can be time-consuming and expensive.
What Could Go Wrong?
There are various different things that can go wrong if you use a payable on death account as an estate planning device.
For one thing, you may look at your beneficiary as you would an estate executor. When you draw up a last will, you choose an estate administrator called an executor. The executor distributes assets according to your wishes as stated in the will.
You could simply tell the beneficiary of the POD account how you want the assets distributed after you die.
The difference between the two lies in the fact that the last will is a legally binding document. The administration of an estate is supervised by the probate court when a last will has been admitted.
As a result, there is oversight. The executor is compelled by law to distribute the assets in accordance with your wishes as stated in the will.
On the other hand, an entirely different situation exists when you add a beneficiary to a POD account. The beneficiary becomes the sole legal owner of the assets that are in the account. He or she is not compelled to follow your verbal instructions. There is no court providing oversight.
This is just one problem with POD accounts in Charlotte North Carolina. There are others.
Custom Crafted Estate Plan
There is no reason to attach yourself to overly simplistic estate planning notions. The wise course of action is to discuss all of your options in detail with a licensed Charlotte North Carolina estate planning attorney.
Arranging for the transfer of the assets that you have been able to accumulate throughout your life is an important endeavor. It is something that should be entered into with the benefit of professional guidance.
If you are interested in creating a personalized estate plan that ideally suits your needs, contact our firm to schedule a free consultation.