119 | Are Your Bank Accounts Set Up Properly to Bypass Probate?

Do you have the proper beneficiary designations setup on your bank accounts?  In this episode, I dive into the overlooked yet essential role of Payable on Death (POD) designations in estate planning.

Whether you have a will, trust, or both, your plan might still not include properly designated PODs on your bank accounts, CDs, and money market funds.

In this episode I discuss:

• What a POD (or TOD) designation actually does
• How PODs help your loved ones avoid probate delays
• The simple, free process to set them up through your bank
• Common mistakes—like assuming joint accounts are enough
• Why naming minors as POD beneficiaries isn't recommended

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From my soul to yours,

Erin

Chapters

• 0:00 Introduction to POD Designations
• 1:42 Understanding PODs and Their Importance
• 4:44 Common Misconceptions About Beneficiaries
• 6:45 How to Set Up Your PODs
• 8:41 Overcoming Resistance to Estate Planning
• 11:36 Call to Action and Closing Thoughts

Transcript

Erin Gray: 0:00

Today on the podcast. I'm talking about a simple, often overlooked tool that can save your family from financial headaches. It's called POD, or payable on death, and if you've never added a POD to your accounts or know what I'm talking about, not sure what it is this episode is for you, girlfriend. So I thought that I would have this episode because it was two clients in the same week that I was discussing this with them and they were not aware of what I was referring to. So typically I take that as a hint sign of hey, I need to probably talk about this on the podcast to share it with more people. So I want to say, first and foremost, I'm not an attorney, I'm not your financial planner, so always refer back to what they are suggesting for you, and I will say I've had, like I said, many clients that I've worked with that have had attorneys, and when I ask about this designation, it is often overlooked. So let's talk about what a POD is. What does it mean? How does it pertain to you? So most banks or brokerage houses like think of Fidelity or probably Vanguard they use what's called a POD. Now, life insurance companies typically will call it a beneficiary designation. Basically, it's the same thing, they're just calling it something different. So a POD allows someone to receive the funds in your account after you die without having to go through probate. You know most of my clients. When they come to me they've already have a will or a trust and that's already set up. And if you don't, this might even be more important for you to pay attention to, because I mean, even if you do have a will or trust and it's not designated, still pay attention. So it applies to typically like bank accounts. When I say brokerage, I mean money market accounts, checking, saving CDs, things like that. It's a simple form that you file with your bank that names a beneficiary and typically they have a primary and a secondary beneficiary.

Erin Gray: 2:09

Like I said, I'm not your attorney, I'm not your financial planner, but if you have a will or a trust set up, typically a trust you want to, your attorney should be advising you or they have advised you. Maybe, maybe not, I'm not sure, depending on your state. But you know, like mine is set up where it's my trust is my the primary POD. So it's just, if you don't have that set up, you want to make sure. If you don't have a trust set up, then you want to make sure you have somebody designated, because these are the types of assets that will get hung up in probate. So why does this matter? Because if you do have a will or trust, depending on the what your attorney has set up for you and sometimes an attorney might set up both for you because of how a trust works and then to have poor overwill it's probably another topic, another podcast episode but you definitely want to make sure that you have this set up so it follows the trust and if you have a will, you'll want to make sure that it bypasses outside of the will, because probate for some, depending on your States, depending on your attorney, all of the things probate can take months, sometimes years.

Erin Gray: 3:19

I have family members that were 20 years in the making, probably 25 at this point, because there are family members that are fighting what the trust has said. So, um, but if you don't have this designated, this is going to go to probate and it's going to temporarily freeze this access to the cash. So whoever would be administering your estate, they would not have access to this. So a lot of women think like a will is enough or your trust is, you know, fine, but I I want to say you know wills go through probate. That is one of the benefits of a trust is it bypasses probate, um and PODs. If you have it on file, it bypasses all of that and it's quick and it's easy and it's free to set up. They might even call it a TOD, which is a transfer on death, but I've seen most banks just call it a POD. So I want to talk about some common misconceptions. You know, assuming that because you have a joint account, that that is the only way to ensure access. That is not true.

Erin Gray: 4:35

Um. Also forgetting to update beneficiaries after life events. So if you were married and now you're not anymore, um, someone has passed away, like really making sure you just stay on top of it and I always put you know. I always tell my clients like I wear my 3d financial planning or hat when we're working together, but I also wear my like spiritual 5D hat, and what I mean by that is I'm telling you this information because we do live on the material plane and we do know the way that the world works in the financial planning and the estate planning. And my 5D spiritual hat for you is coming from the energy that, like I'm fine, nothing's happening to me, but I also am empowered and I'm also going to take care of my money and be a good steward of my money, right? So it's not coming from the place of like, oh my gosh, we have to fix this. Oh my goodness, you know something's going to happen. From that fear-based place. It's just like. You know what. I make sure all my accounts have the proper desert, you know beneficiary designations and I take care of my estate planning.

Erin Gray: 5:37

Also, too, is not aligning your PODs with your overall estate plan. So if you have a trust and you don't have the POD as the trust, like I mentioned earlier, then technically it's not funded correctly, and this is something that I had a conversation with a client the other day. It's not funded correctly and this is something that I had a conversation with with a client the other day. I said you know, a trust is amazing. What is really important with the trust is what is and this is what your attorney should be talking to you about is that it should actually be what they call it. I'm going to air quote funded, when a trust is funded, meaning the assets are actually put inside the trust, which actually means that you go to the you know tax assessor and you put your home in the trust, or you put you know, you make sure that your beneficiary designations for your IRAs or your qualified accounts have the trust as the beneficiary. That is what I mean when I say is the trust funded? Because just because you have a trust but you don't do anything with the assets, the trust isn't funded properly. So it's easy to set up.

Erin Gray: 6:45

If we're just talking about your bank account checking savings accounts, if you have any CDs money market account, you just call your banker, go to the bank and ask for a PD, pod form, um, and I will say this, that some of the banks, some of the brokerage houses, may not know what this is. I know that when I switched over to fidelity, I had to take it up the ladder, the chain of command, and tell them. This is what I need, because the person that answered the phone told me that that was not possible. I'm like, not true. You need to go check your facts. So just be persistent when it comes to this that this does exist.

Erin Gray: 7:25

Obviously, I'm not your attorney and depending on what state you live in, it may be called something different. So just be aware of that. You want to reach out to your state attorney. You want to make sure you're doing this the correct way. But I'm just telling you this, having this episode for you, because clearly there's two clients of mine that experienced this. There's more women out there, I'm sure, that are unaware, and I want to empower you and to talk to you about this. So you set it up based on, either, if you don't have a will or trust, who would be your beneficiary Also not an attorney, but I would highly recommend not making any children who are under the age of 18, your beneficiary check with your attorney on that as well but just really deciding who are going to be my, my, beneficiaries. You're going to need their full legal name, social security number, probably keep the documentation safe and up to date and also, like, if you have an executor or a trustee, that they know where these accounts are and you know the POD on them.

Erin Gray: 8:29

Okay. So let's talk about okay, we know that this is necessary, but if we are not taking action, I want to address that as well. So procrastination around this might bring up. Maybe we have some fear of death, maybe we have avoidance, maybe we this might show up as a freeze response. So what I want you to do is, first and foremost, if you're experiencing resistance, when I say this, I want you to tap into your body, I want you to get curious. This is an opportunity for you to lean in and for you to learn more about yourself. Really hone in on what is you know, what are you thinking, feeling, believing right now? That's causing the resistance, and taking small action is a powerful way for, or to create this self-regulation, right?

Erin Gray: 9:30

Maybe you just put it on the calendar where you actually just look at your bank accounts and see if they have a POD. That's where you start. Maybe the next week you look and you see okay, I don't have them set up. What would I need to do? Maybe I need to contact my attorney. So just notice what are you feeling in your body as I'm talking about this. Are you feeling overwhelmed? Are you feeling resistance? Are you feeling like you know oh my gosh, I don't know. Like, just notice what the body is doing and allow this as an opportunity for you to connect to yourself even deeper. You know, you do not have to tackle everything today. Fix everything today. Like I always say zero to 1%, it's everything. Start where you are, just get some facts, get some information and then go from there.

Erin Gray: 10:22

I just wanted to have an episode about this because there are many of you that tune in every week and I wanted to spread the word and share that. If this is something that is you know, I am seeing in in my clients it's probably happening a lot outside of them as well. You know so in the collective consciousness. So I just want to encourage you to. This is another way to you can feel empowered. You can choose to feel empowered about this. You have this knowledge.

Erin Gray: 10:55

Now go do some research on your accounts, see what they say, and it's been my experience that it actually says that on the statement. So if it doesn't say it on the statement, I would call my bank and I would ask if it actually is existing on your account at all. That's all I have for you. If this is something that is bringing up some internal dialogue and you want some support, not just to walk through this, but noticing your relationship with money, how you're feeling in your body, so that you can feel more safe and confident with money, more empowered I would money more empowered. I would love to support you. You can head over to the link in my show notes and click on the link to schedule a clarity session, and we can really just get to know one another, dive into what it is that you're working on, how I can help you. Or you can head over to my website generatealifewelllivecom and schedule a call. Okay, that's all I've got for you. I'll see you next time.