The estate executor is in charge of distributing assets from an estate, along with many other steps. They will tell the beneficiaries what to expect, distribute copies of the will, pay off debts and much more.
But what if the person who made the estate plan used a Payable On Death (POD) account? This means that they already set up a beneficiary designation for that account, authorizing that beneficiary to take over full control when they pass away. Does the estate executor have anything to do with this account, or does the beneficiary get immediate access?
A POD account automatically leaves the estate
There are some exceptions, but the estate executor is typically not involved. The reason for this is that they just handle the assets that are still in a person‘s estate after they die. Because the POD account switches upon death to new ownership, it leaves that person‘s estate. The executor doesn’t have to do anything with it because it is instantly within the beneficiary’s personal estate.
As noted, there are some exceptions, often when things get complicated with funds. If the majority of a deceased person’s assets were in a single POD account, for example, the estate executor may not have the money that they need to pay off debts and take other necessary steps. These situations are relatively rare, though, and careful planning in advance can help to avoid them entirely.
Are you and your family going through this process? Whether you are the estate executor, the beneficiary on an account or just a family member, it’s quite important that you understand all the legal steps you’ll need to take and the options you have at this time.