Is there any disadvantage of pod?

Is there any disadvantage of pod?

The main drawback of a POD account is that it is not possible to name alternate beneficiaries to your account. A POD account could make it easier for your loved ones to get the funds they need right away to pay for those and other expenses. It’s important to keep in mind that beneficiaries can’t access any of the money in a POD account while they’re alive. Do Beneficiaries Pay Taxes on POD Accounts? Yes, beneficiaries may have to pay inheritance taxes on a POD account in the way any other inheritance is taxed in their state. Only a handful of states charge this tax, and the tax does not apply if the POD account comes from your spouse, but this is a potential risk. If, however, none of the POD payees you named is alive at your death, the bank will release the funds in the account to your executor, who will be responsible for seeing that the money is distributed under the terms of your will or (if you have no will) state law.

What is the advantage of POD account?

Understanding Payable on Death (POD) A bank account with a named beneficiary is called a payable on death (POD) account. People who opt for POD accounts do so to keep their money out of probate court in the event that they pass away. It is easy to convert an account to a POD account. Understanding Payable on Death (POD) A bank account with a named beneficiary is called a payable on death (POD) account. People who opt for POD accounts do so to keep their money out of probate court in the event that they pass away. It is easy to convert an account to a POD account. A question often posed to us is “Can I challenge a POD designation made on a bank account by my [*] before [his or her] death?” The answer is yes.