A POD account is an account that is “Payable On Death” of the account owner(s) to another person, called a “POD payee,” who is listed on the account. Quite often you will see these accounts with bank, brokerage firms, or other financial institutions.
So does this mean that upon the death of the account owner that the account is automatically paid to the designated POD payee? The answer to this question is no, not necessarily. It depends on whether the account with the POD payee designation has just one owner or has multiple owners and, not to complicate matters, it also depends on who dies first.
Under California Probate Code, a POD payee means a person designated on a POD account as one to whom the account is payable after the death of every account owner and only on request of the designated POD payee. In the case where there is just one account owner, upon the death of that account owner the POD payee may make a request to the bank, brokerage firm, or other financial institution to pay the account directly to him or her. The POD payee only has the legal right to the funds in the account because he or she has survived the account owner. If the designated POD payee does not survive the account holder, then the POD payee designation goes away and the account becomes a part of the deceased account owner’s estate.
In the case where there are two or more account owners of an account with a designated POD payee, the rights of the POD payee to the funds in the account are only created after each and every account owner has died. The reason for this is only the account owners have, during their lifetimes, the present right to use or withdraw the funds in the account. Meaning, the account owners have full control over the account during their lives and the POD payee has no legal right to access the funds in the account. The account owners also have the ability to freely change the listed POD payee or remove the POD payee designation all together. Again, it is only upon the death of each and every account owner that the designated POD payee has a legal right to the funds in the account because he or she has survived all account owners.
In order to request and obtain the funds in the account upon the death of the last account owner, the designated POD payee typically needs a certified copy of the account owner’s death certificate. Often the bank, brokerage firm, or other financial institution will require more information per their company’s policy. The best course of action when the account owner dies is for the POD payee to contact the bank, brokerage firm, or other financial institution for that company’s requirements for claiming the account funds.
There are some complicated rules under California law regarding accounts with POD payee designations. As such, if you own an account with a POD payee designation or you are listed as a POD payee on an account owned by one or more other persons and are interested in more information, you should contact the Chilina Law Firm or another California attorney who practices law in the area of estate planning and probate and trust administration.
Authored by Karen Chilina and Co-Authored by Greg Chilina
Chilina Law Firm, a Professional Corporation, is a full-service estate planning, probate, trust administration, business law, and real property law firm that provides a wide-range of advising, transactional, and litigation services to its clients from its office located in Atascadero, California. The firm’s attorneys represent individuals and business entities in an assortment of transactional and litigation matters involving estate planning (including trusts, wills, powers of attorney, and medical directives), probate, trust administration, as well as general business law, contracts, corporate governance, land use, and real property. Chilina Law can be contacted by telephone at (805) 538-5038 or by email firstname.lastname@example.org visit the Chilina Law Firm atwww.chilinalaw.com. Chilina Law Firm is based in Atascadero, California and serves North San Luis Obispo County communities, including Santa Margarita, Atascadero, Templeton, Paso Robles, and San Miguel.
Attorney Advertising: The content of this blog/article is merely to provide general information on a topic of law and should not be construed as legal advice or the formation of a client-lawyer relationship. A client-lawyer relationship with the Chilina Law Firm will be created only through a written agreement signed by all parties. Anyone reading this blog/article should not rely on the information provided alone and should seek independent counsel regarding your specific situation.