The topic of this article is about a special type of California bank account sometimes known as a ‘Totten Trust’. It’s a very simple and quite effective way of avoiding probate, which is why it is also well known as a POD (payable on death) account. POD accounts are just bank accounts in which you name a beneficiary to inherit the funds once you die.
How Planning Your Estate Avoids Delays
Over the past several years the California courts have been experiencing a budget crisis, which has resulted in some very long delays in getting hearing dates. That makes avoiding these time delays and the expense of the probate court proceedings crucial.
Naming your beneficiary in order to take advantage of this method is not going to have any immediate consequences while you’re still alive. Your beneficiary will have no rights to your money until you die. That means they are unable to withdraw your money, and that your money will not be considered their asset should they get divorced or are sued over debts they run up. If they file for bankruptcy, it does not affect you in any way.
How POD Accounts Avoid Probate
The reason POD accounts are so popular and widespread is because they offer an option that easily transfers money at the time of death without all the hassle. It avoids any long probate court proceedings. A Palm Springs estate planning law firm can advise you of the proper steps to take.
To set up a POD account or turn your existing checking or savings account into a POD is merely a matter of filling out paperwork that your bank provides. This is when you will name your beneficiary. These documents must then be turned over to the bank so they will have a record of who you named as beneficiary.
Who Owns the Account
This account belongs to YOU. That means you can close it, withdraw funds from it, or change the beneficiary as you wish. It is still your money and will be handled like any other bank account, meaning it is not protected from YOUR creditors, just those of your beneficiary.
California Rules Around POD Accounts
In California, there will be a brief 40-day waiting period before the bank releases your funds. However, the probate court proceedings will have been avoided and are unnecessary. Your beneficiary will simply go to your bank and collect those funds. Contact your local Coachella Valley trust and estate lawyers for more details.
Contact Our Coachella Valley Trust and Estate Lawyers for Help with Planning
Contact our Coachella Valley trust and estate lawyers for help with planning and to get a consultation at 760-322-2275.
