If you’re like most people, you may want to do everything in your power to protect your assets and beneficiaries upon your passing. Unfortunately, many assume that estate planning is limited to a will, which is far from the case. As such, one option you may want to consider for your estate is a payable-on-death account. If you’re unsure what this is or how it works, you’ll want to keep reading. The following blog explores what you should know about this option and the importance of working with a Long Island estate planning lawyer to discuss your legal options.
What Is a Payable-on-Death Account and How Do They Work?
A payable-on-death account is an estate planning option that lets you name a beneficiary to automatically inherit the funds upon your passing. The account holder will retain full control over the account throughout their life, allowing them the opportunity to
Under New York law, these accounts are also called a Totten Trust. However, unlike traditional trust funds, you do not need to establish a trust. Instead, you’ll create the account through your bank or financial institution.
What Are the Benefits of These Accounts?
One of the primary benefits of establishing a payable-on-death account is that it will avoid the probate process. Generally, when someone passes away, even if they have a will, their estate must undergo the probate process. This is to validate the will and oversee the transfer of assets from the estate to the intended beneficiaries. Unfortunately, this process can take a considerable amount of time and is often expensive.
In addition, because this functions as a trust, information regarding the transfer of assets will not become public record, meaning you can have a sense of privacy regarding this matter.
You should note, however, that you must ensure that your payable-on-death account aligns with the information in your will. If they differ, your payable-on-death account will take precedence. As such, you’ll want to ensure that you review your will after establishing the trust to ensure there is no conflicting information, as this can lead to disputes after your passing.
How Do I Establish One?
To establish a payable-on-death account in New York, you’ll need to either establish a new account or choose an existing account to add a beneficiary designation to. If you wish to designate a beneficiary for an existing account, you’ll need to contact your bank and request a beneficiary designation form. This allows you to name beneficiaries to inherit the funds in your account upon your passing. When submitting this paperwork, you’ll need to bring a valid ID and information about the beneficiary (full name, address, and Social Security number). You should obtain a copy of the confirmation document with the rest of your estate planning files.
If you are interested in establishing a payable-on-death account in New York, it’s in your best interest to discuss your circumstances with an experienced attorney at Barrows Levy PLLC. Our team understands how overwhelming these matters can be to navigate on your own, which is why we will do everything in our power to help you achieve peace of mind for the future. Contact us today to learn more.
