Also known as: payable-on-death clause · payable-on-death clauses · payable on death clause · payable on death clauses · POD clause · POD clauses · POD · pay-on-death
Written by attorneys · grounded in primary & secondary sources — see below
A contractual designation on a deposit account directing the financial institution to pay the account balance to one or more named beneficiaries upon the death of the account owner or owners.
Patrick Phan opened a savings account at a credit union titled solely in his name as trustee for Priscilla Parks. No separate trust instrument existed and the account held only the deposited sums. Upon Patrick's death the credit union paid the balance directly to Priscilla under the account terms.
Parker Phillips held a checking account and certificate of deposit with payable-on-death designations to his daughters. After Parker's death his surviving spouse claimed an elective share that included those accounts. The court determined the POD balances formed part of the augmented estate subject to the spouse's election.
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An account titled in the name of one or more parties as trustee for a beneficiary qualifies as a POD designation when the relationship arises solely from the account terms and the only trust property consists of the sums on deposit.
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Divorce revokes any revocable disposition to a former spouse in a governing instrument such as a POD designation unless the governing instrument, a court order, or a marital property contract expressly preserves the designation.
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If survival by 120 hours cannot be established by clear and convincing evidence each party is deemed to have predeceased the other so the POD designation fails and the funds pass through the decedent's estate.
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A later will generally cannot revoke a POD designation because the account contract requires the owner to follow the financial institution's specific procedure for changing the beneficiary.
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