How to Create a Payable on Death Account

Setting up a payable on death account can provide you with a way to pass assets onto a beneficiary without them having to go through probate. You should be able to set up a payable on death account at any financial institution. You will need to specify that you want this type of account, because a traditional bank account does not provide you with the same features. The financial institution will give you paperwork to fill out and you will have to give them the information that they need.

Joint Accounts

If you have a joint bank account, you might also be able to add a payable on death designation to it. This will allow all of the money in the account to go to the joint account holder when you pass away.

Beneficiaries

When you are filling out the paperwork, make sure that you remember to name a beneficiary. The person that you name as your beneficiary is going to inherit the entire account when you die. You might also want to name a secondary beneficiary in case the first beneficiary passes away before you do.

Claiming the Money

In order to claim the money from a payable on death account, you simply have to provide the death certificate of the account holder to the bank.



What are the tax implications of payable on death accounts?



Payable on death accounts pass money onto a specific beneficiary when the account holder dies. This type of account is often used so that the beneficiary will not have to go through the probate process to get the money in the account. While this does make things easier, it does not necessarily help when it comes to taxes. This money will still count as part of the deceased individual's estate. This means that normal estate tax rules will apply, and the beneficiary will still be liable for any taxes that are due.

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