There are simple strategies to reduce and mitigate a Florida resident’s exposure to probate and probate costs.  One popular method is to utilize a POD/Totten Trust account designation at a financial institution.

  • Pay-on-Death Accounts/POD Direction

A Pay-on-Death account  (“POD”), which is occasionally still known as a “Totten Trust” because of a landmark case in New York that first permitted this type of ownership, is simply a direction found on the account paperwork of a financial organization that specifies who (beneficiary or beneficiaries) shall receive the funds in the account upon death of the account holder.

In the event of the death of the account holder, the funds immediately vest in the beneficiary, and thus, the funds are by definition a non-probate asset.  The beneficiary possesses no rights until the account holder dies, and the account holder may change the beneficiary at his/her discretion.  The POD is highly flexible, and it bares only an opportunity costs for the few minutes to actually fill out the form.

PODs are “boilerplate” items that are included in most application(s) to open a financial account whether a checking, savings, money-market, or equity fund. This simple yet effective tool, however, is many times ignored by the account holder.   When the POD section is omitted or left blank as most POD language is, the funds typically become a probate asset or subject to a court supervised administration. This is rarely the intent of the account holder, and many times, this omission may create difficulties for the heirs and beneficiaries of the deceased.

 

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