what is payable on death pod 
a bank account with a named beneficiary is called a payable on death pod account also known as a totten trust pod is an arrangement between a bank or credit union and a client that designates beneficiaries to receive all of the client s assets the immediate transfer of assets is triggered by the death of the client though morbid these structures are important to understand understanding payable on death pod an individual with an account or a certificate of deposit cd at a bank can designate a beneficiary who will inherit the money that s in the account after their death people who opt for pod accounts do so to keep their money out of probate court in the event that they pass away it is easy to convert an account to a pod account designating a beneficiary is a free service that allows for the transfer of all checking and savings accounts security deposits savings bonds and other deposit certificates the account holder only needs to notify their bank of who the beneficiary should be the bank on its end will give the account owner a beneficiary designation form to fill out the completed form gives the bank authorization to convert the account to a pod the named beneficiary is not entitled to any of the money in the account while the account holder is still alive upon death the beneficiary automatically becomes the owner of the account bypassing the account holder s estate and skipping probate completely in the event that the owner of a pod account dies with unpaid debts and taxes their pod account may be subject to claims by creditors and the government if the account holder lives in a community property state their spouse has a claim to half of the assets in the pod account except the assets that were acquired before marriage or funds that were inherited if the account was jointly owned by more than one person a named beneficiary cannot access the funds until the last owner dies in this case the assets in the account will be turned over to the beneficiaries named by the last surviving owner there are no stipulations on the minimum amount of money that must be available in the account upon death there are also no limitations to a pod account the account holder can spend all the money prior to their death change the beneficiary on the account or close the account completely to lay claim to the funds the beneficiary has to present a government id as proof of identity in addition to a certified copy of the death certificate a payable on death pod account is more powerful than a last will and testament if a pod account has one individual named as the beneficiary and the will of the account holder lists another individual as a beneficiary the pod designated beneficiary prevails the named beneficiary on the pod account is not required to honor the account holder s last will and testament which makes it imperative that the individual ensures to change or cancel the pod beneficiary if they have someone else listed on their will benefits of a pod accounta significant benefit of pod accounts is that an account owner can increase their coverage limit under the federal deposit insurance corp fdic the standard coverage limit for an individual s assets at a particular financial institution including checking and savings accounts money market accounts and cds is 250 000 1since a pod is a type of revocable living trust that has someone else with a beneficiary interest on the account the fdic provides up to 1 250 000 coverage on up to five accounts at a single bank where each account has a different beneficiary each beneficiary cannot be covered for more than 250 000 instead of saving 1 250 000 in one account which will only be insured for up to 250 000 having multiple pod accounts can increase an account holder s coverage by up to five times the standard limit 1as a general rule a pod account can have more than one beneficiary however if the account owner wants each beneficiary to receive unequal portions of the assets in the account they must check that their state laws allow it given that some states only permit an equal distribution of funds in a pod account a pod account is very similar to a transfer on death tod arrangement but deals with a person s bank assets instead of their stocks bonds mutual funds or other investment assets 2 both pod and tod agreements offer a quick means of dispersing assets as both avoid the probate process which can take several months drawbacks of a pod accountthe main drawback of a pod account is that it is not possible to name alternate beneficiaries to your account if the person whom you nominated to receive the proceeds dies before you then the contents of your account are automatically transferred to an estate or will naming multiple beneficiaries to the account can help offset this drawback another drawback of a pod account is when there are taxes and loans to be paid out upon death as part of a bigger estate the executor may find it difficult to settle these expenses using pod accounts finally naming multiple beneficiaries can complicate the process of dividing the proceeds from complex financial instruments such as bonds in some cases the proceeds are a mix of cds and other interest bearing financial instruments divvying up their proceeds requires negotiations and compromises among beneficiaries 