When you first start to get serious about planning your estate you will invariably have a lot of questions. In the information age that we are living in the first step most people take when they are trying to learn about something that is new to them is to scour the Internet.
When you do this looking for estate planning information you will invariably find myriad unfamiliar terms, hard-to-understand definitions of complex financial instruments, and a veritable alphabet soup of acronyms that you have never seen before.
All of this can be daunting, and there are indeed some rather complex estate planning strategies that are appropriate in some instances. But not all estate planning tools are complicated, and as the scientists and mathematicians tell us the simplest solution to a problem is the most elegant. With this in mind, one very direct and efficient way to transfer assets to your heirs is through the use of pay on death (POD) or transfer on death (TOD) accounts.
These accounts can be started at most banks and at some brokerages, and the way that they work is that you fund the account and you name a beneficiary. Should you pass away, your beneficiary assumes ownership of the assets in the account directly. This is especially appealing to some people because this transfer takes place outside of the time consuming process of probate.
Another nice thing about pay on death accounts is the fact that you have total control of the assets throughout your life and you can use them whenever and however you want to. You can also close the account or change the beneficiary if you so choose, and this flexibility is another reason why many people choose to use pay on death accounts as transfer vehicles when they are planning their estates.
Larry Parman
Founding Attorney
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