One tool that you can use when making your estate plan is known as a payable on death account. Technically, this does not have to be included in the rest of your planning. Instead, you just need to fill out the proper beneficiary designations at the bank or other financial institution. You choose a beneficiary and then, when you pass away, the beneficiary becomes the new account holder.
When it comes to planning, there are a variety of different tools that you may want to use together. A payable on death account is just one way to transfer financial assets. Here are two of the potential benefits that it can bring.
No one else can dispute the transfer
First of all, everything you write in a will could potentially be the subject of an estate dispute. This doesn’t happen in every case, but disputes are common and sometimes very difficult for beneficiaries. But the payable on death account transfers immediately, so it’s not part of your will and can’t be disputed.
The beneficiary gets the money quickly
Another potential benefit is that the person can access and use the money almost immediately upon your passing. They don’t have to wait as long as they may with distributions from a will, and they don’t have to deal with making withdrawals from a trust. They simply have access to a bank account where they can get funds to help with funeral costs and much more.
Considering all estate planning tools
This is just one example of why you may want to go beyond a simple will when drafting an estate plan. Be sure that you carefully consider all of the tools and options that you can use to create a plan that will work best for your family.
