A payable-on-death account is a regular bank or credit union account set up with a typical financial institution. The ideal component that sets it apart, though, is that its funds may be immediately and directly transferred to your designated beneficiary at the time of death. Meaning, these separated assets may legally bypass the lengthy and taxing probate process. Please follow along to find out more about how a beneficiary is supposed to claim funds from a payable-on-death account and how a proficient Broward County estate lawyer at The Probate Lawyers can help you choose the right person to receive this thoughtful inheritance.
How does a beneficiary claim funds from a payable-on-death account?
First things first, while you still have the opportunity to, it is recommended that you inform your beneficiary about the payable-on-death account you assigned to them. This is so they can know what steps they are expected to take upon your unfortunate passing and ensure that your last wishes are carried out efficiently and to their fullest.
With that being said, the first action your beneficiary should take to claim funds from your payable-on-death account is to provide the associated financial institution with your certified death certificate, along with their personal identification. This may prompt the financial institution to process their request without the need to inform or wait on the Florida probate court.
As simple as that, if no issues are detected, the financial institution may release these funds to your beneficiary, usually in a matter of a week or even a few business days. The quick turnaround in receiving these cash assets may be especially helpful if this same beneficiary has taken charge of planning and paying for your funeral and burial ceremonies.
Who can realistically be designated as a payable-on-death beneficiary?
Of course, you may automatically assume that any one of your loved ones is perfect to name as the inheritor of your payable-on-death account, especially your spouse and children. However, there are important considerations to be made before filling out beneficiary designation forms from a financial institution.
For one, if your child is still a minor, you must understand that a financial institution will not release funds directly to them. This means that you will have to incorporate a guardianship appointment and/or custodial account into your estate plan, as well. Or, you may find it simpler to set up a living trust for your minor child instead, which involves the help of an adult trustee.
In another example, your considered loved one may have special needs or a disability. If they currently collect benefits from federal financial assistance programs, they may lose their eligibility if they receive a large lump-sum transfer from your bank account. In this case, you may look into a special needs trust for this specific loved one.
For further legal assistance, please hire a talented Broward County estate lawyer from The Probate Lawyers. Schedule your initial consultation with us today, and see just how much we can do for you.
