Each financial institution has its own set of paperwork it requires to set up a payable-on-death account. Even if you successfully establish this account and fund it with your cash assets, you cannot simply forget about it. That is, it is generally recommended to look back on this account every year or after a significant life event, to make sure it still aligns with your estate planning goals. Specifically, so that you can check on whether your beneficiary designation is still relevant and up-to-date. With that being said, please continue reading to learn what happens when your payable-on-death account is outdated and how one of the experienced Putnam County asset preservation attorneys at the Law Office of Andres D. Gil, PLLC, can help you stay on top of this.
In what ways might my payable-on-death account be outdated?
Even though you may have filled out the forms correctly at the time, changing dynamics in your personal life may now make the beneficiary designation information for your payable-on-death account inaccurate and/or outdated. Below are more specific examples of such cases:
- You may have used your beneficiary’s maiden name before they got married and underwent a legal name change.
- You may have designated your former spouse as the beneficiary and forgot to change it after your divorce was finalized.
- Your designated beneficiary may have unfortunately predeceased you, and you have yet to name a successor.
What happens to my payable-on-death account if it is outdated?
Updating your payable-on-death account with a financial institution may be relatively straightforward. What’s complex is if you fail to do so before your time of death. For one, when this happens, you must know that your payable-on-death beneficiary designations are likely to take precedence over the instructions left behind in your Last Will and Testament document.
So, like the example provided above, say you name your current spouse as the designated beneficiary of these cash assets in your will document, but your former spouse is still listed on the account. Well then, your former spouse may be entitled to a transfer of these funds, per the financial institution’s operating procedures.
Of course, such discrepancies can lead to tensions and disputes amongst your loved ones, which may trigger estate litigation proceedings. Such legal challenges may create serious delays in this asset distribution, which defeats your main goal behind setting up this type of account in the first place, which was to give your heir a speedy and direct transfer.
In the example of your designated beneficiary sadly predeceasing you, or if you have otherwise lost touch with them and they cannot be located by anyone, these cash assets may be forced to enter the probate process. Once again, this diminishes one of the key benefits of a payable-on-death account, which is to avoid this lengthy and costly legal process.
For further legal assistance, please hire one of the skilled Putnam County asset preservation attorneys from the Law Office of Andres D. Gil, PLLC. Schedule your initial consultation with us today, and see just how much we can do for you.
