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David Toback, Attorney at Law
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Simple Bank Accounts Aren’t So Simple When Doing Estate Planning

Bank accounts are probably the most common form of assets that are dealt with when someone passes away, because most people have a bank account, even if they don’t have advanced wealth management tools like trusts or securities. In many cases there are multiple names on bank accounts. How you name and term your accounts can make a difference as to what happens to them after you pass away.

Who Gets the Bank Account Funds in Joint Accounts?

Florida law states that where there are two names on a bank account, and one person passes away, it is presumed that the intent was for the other named person to inherit those funds. Only “clear and convincing evidence” of a contrary intent will overcome that presumption.

That sounds obvious, and in many cases people will want their funds going to whomever is on the account with them anyway. But not always. For example, you may be married, but for various reasons you may own a joint account with your parent. If you pass and your intent is for your spouse to receive those funds, there could be a probate problem when the money is presumed to go to your parent.

There is also an option for a “pay on death” or POD account. These kinds of accounts allow you to designate who gets the funds when one or all of the account holders pass away. Unlike with traditional accounts, there is no presumption, and no way to rebut any presumption.

In other words, the inheritance of POD funds can’t be challenged by showing what a party intended or didn’t intend. It’s absolute. POD accounts are not even assets of the estate for the purpose of probate. They are the property of those who have been designated as the beneficiaries.

POD accounts can avoid any litigation, challenges or hassle—in many cases, the beneficiary needs only to show up at the bank with proper verification, and will be entitled to the assets.

Risks of POD Accounts

But POD accounts can have risks. POD accounts only unconditionally leave funds to a single designated beneficiary. They can’t order money be given to A only if A does this or that. They can’t leave 10% to A and 90% to B. You can’t leave money to A, to be spent for B’s college expenses. You need a will or other estate documents for that.

Additionally, people often flippantly open POD accounts and name someone a beneficiary, but then execute estate documents that are more detailed, or which contradict the POD instruction. For example, a father will name one son to the bank when opening the POD account, but then order in a will that both his sons should share those funds upon his death. That kind of confusion can lead to litigation over the assets.

You don’t need to be rich to make sure your assets are handled properly. Make sure your estate and your property go where you want. Contact Tampa business and probate attorney David Toback to discuss your needs and make sure your estate reflects your individual needs.

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