Making bank accounts POD to avoid probate

Payable On Death - POD. An individual with an account or certificate of deposit at a bank can designate a beneficiary who will inherit any money in the account after his or her death. ... The bank, on its end, will give the owner of the account a beneficiary designation form called a totten trust to fill out.

Attorney Tom Olsen: Bob, you're on News 96.5. Go ahead.

Bob: Hi, Tom. I want to first say thanks for all that you do. You and your whole staff, your wife, everybody in station for hosting you because everything you give out is really great information that you don't have to. I appreciate everything you do.

Attorney Tom Olsen: Thank you, Bob.

Bob: I have a will but it's old. It's probably outdated. My question is, if I have everything going to my brother as far as all my financial accounts, he's the beneficiary. That's always covered. Now, if you don't have a will and you have that for sure, then that should hopefully not have any issues with that going to him. Is that correct?

Attorney Tom Olsen: Bob, what you're telling me is this, is that on your IRAs, life insurance, you've named your brother as a beneficiary. On your bank accounts, checking, savings, CDs, money markets, investment, non-IRA accounts, those accounts are in your name only, but you've made them POD, Payable On Death to your brother.

Bob: Right.

Attorney Tom Olsen: Bob, you've done great. That is a great tool for avoiding probate. Now, let's say that your accounts were not POD, the bank accounts were not POD, you had a will that says everything goes to your brother, guess what? The same result. Your brother is going to end up with them, but they would have to go through probate to get there. By making your bank accounts POD, Payable on Death to your brother, they don't go through probate. You're going to be saving a lot of money.

Bob: What is the main thing for the will besides having that covered?

Attorney Tom Olsen: The will is really just a backup. It's just there just in case you forgot to make something POD. That's the bottom line. When Chris and I are counseling clients about avoiding probate, we tell them, "Look, if we take all steps necessary to avoid probate, what your will says does not matter because what's happening, your assets is not governed by your will, it's governed by how you made somebody beneficiary of your IRA and life insurance and how you made your bank accounts POD. You still want to have a will just in case you forgot to take care of something."

Bob: Thanks for everything. I will definitely be getting the get a new one made up.

Attorney Tom Olsen: Bob, do you own a piece of property, by the way?

Bob: Not at the time. I could be down in the future, but not at the time right now. I know if I did, that would definitely have to be something to take care of. I understand that.

Attorney Tom Olsen: We would help you to avoid probate on that using a ladybird deed.

Bob: Thank you very much.

Attorney Tom Olsen: All right, Bob. Hey, buddy, thanks so much for all your great calls and questions. We do so much appreciate it. We appreciate all you listeners out there that tune in to us every week. We're very grateful for that. If I may suggest for you to go outdoors and take pleasure in the beauty of nature. As always, enjoy your friends and family. My name is Tom Olsen. The name of the show is Olsen On Law. You're listening to News 96.5.