As part of your estate plan, you want to pass your main bank account on to a specific beneficiary. You may be giving other financial or tangible assets to other beneficiaries, but now you’re looking to incorporate this bank account into the plan. That being said, you don’t want to lose access to the funds before you pass away. This is your main account.
You do have a few different options to do this, some of which are more complex than necessary. For instance, you could withdraw the money from the account and put it into a trust. You could also list the bank account as one of your assets in the will and leave it to the beneficiary that way.
However, one other option you may want to consider is a payable-on-death (POD) account.
How does this work?
With a payable-on-death account, you get to pick your beneficiary designation today. You still do not lose access to the account, so you don’t have to worry about the beneficiary spending your money or moving it to a different account. But you can declare the beneficiary in advance and then, when you do pass away, they become the account owner.
One of the big benefits of doing this is that it is very quick. The transfer can happen in just a few days. Additionally, there’s a much lower chance of an estate dispute because the payable-on-death account isn’t part of your estate at all. When you die, the other person becomes the owner and it enters their estate. No one can challenge it like they could if it was part of your will.
As you can see, it’s very important to consider all of your legal options when drafting your estate plan.