Bank’s Have a Secret

Is it a conspiracy?  The banks are working with the government to benefit lawyers and cost your family hundreds if not thousands of dollars.  Or, more likely, the banking industry does not consider estate issues in their business development with new customers.  Bank’s in Pennsylvania are required to freeze an account once the owner has died. (Does not apply when a husband and wife jointly own the account)  The funds are then moved into an estate account which requires the probate court to authorize access.  There are multiple ways to keep this from happening and allowing your family to access the funds very quickly when you pass away.  I want to focus on one method in this post and will write about other options in the future.  Let’s start with PODs, Payable on Death Designations. (Some banks will call it a ITF – In Trust For) Think of a POD like having a beneficiary on a life insurance policy.  With a POD designation your family can go into the bank and access all of the funds in your account.  The bank will not freeze the account and wait for the probate court paperwork.  You could designate several people or a Trust if you have one in place.  There are a  couple important things to keep in mind when adding a POD to your accounts.  This does not replace a power of attorney document.  A POD is only effective when you pass away.  If you have 3 children and only add one of them as a POD then that child owns the account when you pass.  A Will does not over-ride the POD.  The bank will give the funds only to the listed POD. (Now you’re hoping that they share)  There is a major difference between adding owners to the account verses adding a POD.  I will address adding owners to your accounts in a later post.  For now take the tinfoil hat off this mystery is solved.