You may hear some people recommend payable on death or transfer on death accounts when you are planning your estate. Though they can serve a purpose, it is important to understand the fact that these accounts are not going to be a cure-all for most people. Speaking to an experience estate planning attorney will give you more information on this.
POD or TOD accounts are available at banks and credit unions and many brokerages. When you open the account you include the selection of a beneficiary, and this individual would assume ownership of the resources that are remaining in the account at the time of your death. This would take place outside of the process of probate and this is one of the reasons why there are those who tout payable on death accounts.
The downside is that opening one of these accounts does not help you gain estate tax efficiency because you still have complete control of the assets in a direct way throughout your life. As a result they are considered to be part of your taxable estate.
In addition, your beneficiary has no access to the resources while you are alive if you are incapacitated and if you have multiple beneficiaries you may be forced to arrange for them to split the remainder that is left in the account evenly to comply with the financial institution’s regulations.
Payable on death accounts provide a simple solution on the one hand, but they are sorely lacking on other levels. The best way to decide how to provide for your loved ones after you pass away is to sit down and examine all of your options with an experienced and savvy Hartford estate planning lawyer.
Mr. Horowitz was awarded his Juris Doctor degree with honors from the University of Connecticut School of Law. While attending law school, Mr. Horowitz received the American Jurisprudence Award in Legal Ethics and the Nathan Burkan Award.
After graduation from law school, Mr. Horowitz continued his legal education at New York University School of Law where he received a Post Doctorate Law Degree in Taxation. He has also recently received a national achievement award.
Mr. Horowitz is admitted to practice before all the state courts in the State of Connecticut and the United States District Court.
Mr. Horowitz was selected for Super Lawyers in 2021.
- What Are UGMA and UTMA Accounts? - June 1, 2023
- 2023 Caring.com Survey Reveals Widespread Estate Planning Unpreparedness - May 18, 2023
- Secrets and Intrigue: A Look at Five Unusual Trusts - May 2, 2023
