Deposit accounts and certificates of deposit with a P.O.D. designation pass directly to the named beneficiaries upon the primary account holder’s death, and are helpful to keep assets out of probate. A credit union allowing a P.O.D. designation on accounts does not step into a fiduciary role or subject itself to liability related to management of the funds. During the primary account holder’s life, a P.O.D. beneficiary:
- Cannot access the account and should not be given account information; and
- Can be changed at any time by the account owner, without the previously named beneficiary’s consent.
If more than one beneficiary is named, each surviving beneficiary should receive a pro rata share of the proceeds unless the account specifies otherwise. Once assets are paid, proceeds are still subject to taxes and creditor claims owed by primary account holder prior to death.
Questions? Contact Barker, Hodgson & Miller, P.C. attorneys Elizabeth Hodgson or Julie Buenzow.