Pay On Death Benefits Have Flaws: POD Problems

The ugly side of an inheritance.

Solving the problems of inheritance law is worth a look and a deeper understanding. Understanding the differences covered in this article may prevent you from having to hire an inheritance lawyer in the future.

Let me explain:

Let me paint a scenario for you. You go to your banker and tell him hey I’ve got $10,000 in this account, and I want to make sure that if something happens to me, my kids can get to it.

Your friendly banker says oh that’s easy. All you have to do is sign this paper here that says that if you should die, we will pay upon death to this beneficiary. All your loved one has to do is bring a death certificate and valid ID.

You fill out the paperwork and you know that your kids are going to get the $10,000 should you kick the bucket and you go away happy.

On the way home you stop by McDonald’s and get your favorite big Mac and you feel like you solved a big problem for yourself and the world that day.

Then, later years down the road, the unthinkable happens.
You exchange your earthly body for some wings a harp and a white dress that sort of looks like a fighter going into the ring. Of course, I am being facetious and please don’t misunderstand me. I’m not trying to upset anyone if you have lost someone. Lord knows I’ve lost enough family members to outfit a good volleyball team.

But my point will come through in just a moment.

Let’s say it’s been 10 years since you signed that piece of paper. The bank might’ve changed hands or done something else in the meantime. The staff might’ve changed. And when your kid comes in. Let’s say he was 18 when it happened when you signed. Now he’s 28.

Everything is going to be contingent upon who he talks to when he walks through that door.

As soon as the bank sees that there’s money in that account, the bank might tell him, “Hey, you have to get an attorney for us to release the funds.”
Hey… Wait a minute… What happened to the pay on death beneficiary thing?

Well… Your family member is gone. They can’t exactly come to the bank and say that they signed it so that you can get the money.

And the bank gets to call the shots. That is, until you get your estate attorney involved.

I certainly don’t want to scare you. But this happens every single day.

The truth is, the bank often wants to hold onto the money. They also don’t want to be liable for giving up the money and having some other family member come along and say that they were the rightful heir of the money

So, my advice to you is to make sure that you have a POD or pay on death beneficiary clause in place with your bank because it is the easiest way for your loved one to get a hold of the money should they need it. But, you should also have a very strong will and a great attorney that you can tell your family to go to in order to get your will exercised.

If you take these precautionary measures, then, you really are doing your family a favor. You definitely deserve a big Mac on your way home today.