Pay-On-Death Account - Set It But Don't Forget It

August 11, 2014

One of the easiest and most common ways to avoid probate is to create a pay-on-death designation for your bank account. Creating a pay-on-death designation allows the money in your bank account to be paid to the person (or people) you designate in writing with the bank. Upon your death, the beneficiaries you selected will have immediate access to the funds in the account, without probate court involvement or the appointment of a personal representative.

One potential problem with the pay-on-death designation can occur when your bank changes. This may happen because you close your account and move to another bank. Your bank could also change without you doing anything if your bank is purchased by or merges with another bank. In the latter case, the pay-on-death designation may not transfer to your new account at the new bank. If this happens, you need to reestablish the pay-on-death designation with the new bank. This is usually a simple matter of going to a branch office and completing a form.

Regardless of how it happens, a change in banks means you need to review the status of your account. In particular, it means you need to make sure your pay-on-death designations are in place and will work the way you want them to after your death. Failure to pay attention to these details could result in increased time and expense in transferring your assets, or worse, those assets going to someone other than you intended.

 

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