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Do You Need A Payable On Death (POD) Bank Account As Part Of Your Estate Plan?


When setting up a bank account, you have the option of choosing beneficiaries to whom the remaining funds will automatically transfer in the event of your death. This is known as a “payable on death” (POD) bank account.

Many people open payable on death bank accounts as part of their estate plan because the assets in the POD account do not have to pass through probate under Florida law. Probate is a costly and long process of administering a decedent’s estate and distributing their assets and property to beneficiaries.

If you are considering setting up a payable on death bank account, speak with a St. Petersburg estate planning lawyer to determine whether or not you need a POD account as part of your estate plan.

What Are Payable on Death Bank Accounts?

You have the option of designating beneficiaries of your bank account to whom the remaining funds will pass in the event of your death. This is known as a payable on death bank account. Contrary to popular belief, a joint account holder does not automatically become a beneficiary of your POD bank account unless you expressly designate them as the beneficiary.

Note: A joint account holder has the right to withdraw and deposit funds from your bank account.

How Do Payable on Death (POD) Bank Accounts Work?

Beneficiaries of POD bank accounts received the funds upon the holder’s death but cannot withdraw or deposit funds from the account during the holder’s lifetime. However, if the bank account has a joint account holder, Florida law requires the account to pass to the surviving account holder upon the death of the other holder.

Thus, a POD account will pass to surviving account holders until the last surviving holder dies. When this happens, the remaining funds on the account will automatically pass to the designated beneficiaries.

If multiple persons were designated beneficiaries by the POD account holder, the beneficiaries would receive equal shares of the account. Beneficiaries get access to their share of the POD account if they can present proof of death of all holders of the bank account.

Can Your Creditors Go After Payable on Death Bank Accounts?

Generally, no. Creditors cannot reach the funds in payable on death bank accounts to satisfy their claims. Florida law protects banks and other financial institutions from any claims on POD accounts. The only exception to the general rule is if there is proof that the institution violated any laws in managing the funds or distributing funds to the beneficiaries upon the account holder’s death.

Moreover, Florida law allows funds in payable on death bank accounts to be distributed to beneficiaries even if they are disabled or incapacitated. When designated beneficiaries of a POD account, Florida law allows the holder to designate charitable institutions, business organizations, municipalities, and partnerships as a beneficiary.

Schedule a Case Review with a St. Petersburg Estate Planning Lawyer

Speak with an experienced estate planning lawyer in Florida to determine if you can benefit from setting up a payable on death bank account as part of your estate plan. Contact Legacy Protection Lawyers, LLP, to receive a case evaluation. Call 727-471-5868.

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