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It’s a POD, People.

Don’t you just hate it when people talk in acronyms that you don’t understand? You feel like, OMG, you’ve got me SMH and saying don’t use the ABBR —just say the word 4COL. Well, if you are talking to someone about your estate planning, you just might feel like that because trusts and estates law has many complicated concepts, and many  acronyms to express them.

One of these is P.O.D.

What is a P.O.D?

P.O.D. stands for “payable on death.” It refers to a type of bank account that is frequently used as an alternative to a joint bank account. Instead of having a joint bank account, you can set up a bank account to be “payable on death” to someone whom you name. What this means is that upon your death, the account will pass directly to your named beneficiary. One of the advantages of this type of bank account is that it will avoid probate altogether.

Having a P.O.D. is not the same as having a joint account. With a joint account, the joint account holder has the right to deposit or withdraw money from the account both during your lifetime, and after your death. With a P.O.D., the beneficiary does not have those same rights. Instead, the beneficiary of a P.O.D. cannot do anything with the money or the account during your lifetime. He or she will only have access to the money after your death.

If you have more than one beneficiary, then at the time of your death the money will be divided between them, if they survive you. Also, you are not limited to naming human beings as your P.O.D. beneficiary. Often times it’s advantageous to name your revocable trust as your P.O.D. beneficiary.

A P.O.D. can be set up for checking accounts, savings accounts, money-market accounts and CDs.

Why Have a P.O.D.?

One of the chief objectives of any estate plan is efficiency. In large part this means avoiding probate to the extent possible. One reason you might want to consider having a P.O.D. is because it can help avoid tying your assets up in probate court after you die. Financial accounts with a P.O.D. designation pass directly to the designated beneficiary and do not go through probate.

What is Probate?

You may be wondering what probate is and why you want to try to avoid it. Probate is the court-supervised process of paying your debts and distributing your property to the people who inherit it after you die.  It begins with the formality of admitting your will to the probate court and appointing a personal representative for your estate. Then notices are sent to all creditors and all claims against the estate (i.e., all debts) are paid. Probate ends with the final distribution of assets to the heirs.

The average probate process can take months or a year or more. Avoiding probate court proceedings after your death can save your family time, money, and headaches. One way of avoiding probate is by having both a P.O.D. account and a Durable Power of Attorney (“POA”). With these two tools in place, you can control your money, yet your loved ones will be able to assist you and pay your bills for you if you should become hospitalized or incapacitated. It also allows you to leave your money to whoever you want when you die. This approach is far better than, for example, naming one of your children as a joint owner on your bank account. When you name children as joint owners you subject your money to all of your child’s creditors and spouse in the event of a divorce. A P.O.D. designation is much preferred.

Developing the right estate plan that works for your unique situation takes careful thought and planning. Well-planned transfers allow your loved ones to start benefiting from your assets with minimal delay, while cost-efficient planning maximizes the assets available for inheritance.

Protecting Your Family is Just a Phone Call Away.

Don’t leave planning for your future and that of your loved ones to chance. All it takes is one phone call to the Law Offices of Samantha J. Fitzgerald to ensure that your wishes will be followed and your loved ones taken care of when you are gone. We expertly guide individuals through the complex probate process, and capably handle all aspects of the creation, administration, and settlement of trusts as well.  When you work with the estate planning attorneys at the Law Offices of Samantha J. Fitzgerald, you get more than just an estate plan: you get peace of mind. Call us at 954-580-3690 or email us at: [email protected].com today.

Naming Alternates!

Name Alternates! I just had a woman come into my office telling me that she is her mother’s power of attorney. However, she, the daughter is ill and wants to name her sister to take over for her. Mom has Alzheimer’s and is not capable of signing new documents. However, daughter is not legally able to delegate her duties as power of attorney to someone else.

Mom should have named one or more alternates in the power of attorney in case her daughter was unable to perform the duties.

What happens now? Mom might end up needing a court appointed guardian.

Always be sure to name alternates in all of your documents (will, trust, health care surrogate and durable power of attorney), and if you have people (vs. a trust) named as beneficiary on your financial accounts also name alternates.

Handwritten Wills

Is a handwritten Will valid in Florida? Sure is! As long as it is signed by the testator (that’s the person making the Will) at the end of the document, in front of two witnesses who also sign (all 3 must be in each other’s presence at the time of signing). I don’t advocate that anyone draft their own Will because self-prepared Wills are always problematic for lots of different reasons. But if you are in a pinch, and perhaps you have some legal guidance, you can handwrite your Will.

What is a health care surrogate?

What is a health care surrogate designation (aka healthy care proxy, advanced directive or medical power of attorney) and what happens when you don’t have one? A health care surrogate designation is a document wherein you appoint someone to make health care decisions for you if you become incapacitated.

What happens if you don’t have one of these? Florida law says the following people (in the designated order) can make a health care decision for you:

1) Court appointed guardian
2) Spouse
3) Adult child, or if there is more than one adult child, a majority of the adult children who are reasonably available for consultation
4) Parent
5) Adult sibling, or if more than one sibling, a majority of the adult siblings who are reasonably available for consultation
6) An adult relative who has exhibited special care and concern, who has maintained regular contact and who is familiar with the person’s activities, health, and religious or moral beliefs
7) A close friend
8) A licensed clinical social worker

If you don’t want any of the above people making medical decisions for you, then you’d better execute a health care surrogate designation.

Also included in most health care surrogate designations is a HIPAA release, which is where you authorize someone to access your medical information. Believe it or not, even though all of the aforementioned people can make medical decisions for you, they don’t have any access to your medical information . . . . . . go figure. Moral of the story, it’s best to have a health care surrogate designation in place.

Should I have a Durable Power of Attorney?

What is a Durable Power of Attorney and Should I have One? (Part I)
In my opinion, a durable power of attorney is often times the most important estate planning document that you can have. It’s also one of the most abused documents (more about that in Part II). A durable power of attorney (DPOA) gives someone authority to make financial decisions for you, such as paying your bills, talking to your insurance company or credit card company, selling property etc. If you become incapacitated and don’t have a DPOA, the only way someone can help you is to petition the court to become your guardian. Guardianships are intrusive, expensive and time consuming. Don’t end up in guardianship court . . . . . . . . get a durable power of attorney BEFORE it’s too late.

Do you have a safe deposit box?

Safe deposit box cause a lot of headaches when the box owner dies. Certain people (such as a spouse, a parent, an adult child/grandchild, or a person named as a personal representative in a Will) are allowed to open and look in the box, but only to remove a Will or burial plot or life insurance policy. If you’re not one of the designated people, then you have to get a court order to open the box. Nobody is allowed to remove any contents unless they are a joint owner of the box. The only way to remove the contents is to open a probate administration. This can be very frustrating if you live locally, but imagine if your family members live in another state. Safe deposit boxes are good for items you cannot replace, such as jewelry, collectibles etc. If the item can be replaced (i.e., passport, deed to your house, car title etc) it does not need to be in a safe deposit box. Close your box if you don’t need it and safe your family members the headache and expense of dealing with the box.

Durable Power Of Attorney For Your Parents

Trust & Estate Tip of the Day: Do you have a Durable Power of Attorney for one or both of your parents? Are you also a joint owner of their bank account for convenience purposes? If so, you’d better confirm with the bank that you are actually a joint owner and not just listed as the power of attorney (which is called attorney-in-fact). I see this happen often – the (adult) child thinks he/she is a joint owner of the bank account, mom/dad dies, and all of a sudden the account has to go through probate because it really wasn’t a joint account, the child just had access via the Durable Power of Attorney.

Does a life estate avoid probate?

Trust and Estate Tip of the Day:  A friend asked if a life estate avoids probate. The answer is yes it does. As a little background, a life estate is a way of owning real estate. Title is split between two parties, the life tenant and the remaindeman. When the life tenant dies, title automatically passes to the remainderman. Under the right circumstances, this is a great tool to avoid probate. But there are several drawbacks of this type of ownership. For instance, sometimes the remainderman dies before the life tenant, and then a probate is needed for the remainderman. Even when using enhanced life estate deeds (aka lady bird deeds) problems can arise. In most circumstances, a revocable trust is a much better choice than a life estate deed.

You have a Last Will, will you avoid Probate?

Trust & Estate Tip of the Day: You have a Last Will and Testament, so your estate will avoid probate . . . . WRONG! Having a Will does not keep your estate from going through the probate process. Probate is a court proceeding which is necessary when you die owning assets that don’t pass to someone automatically. What passes automatically? Jointly owned assets, financial accounts that name a beneficiary, and assets titled in a trust do not have to go through probate. All other assets that you own typically will go through probate, even if you have a Will. A revocable trust is a simple way of avoiding probate, especially for real estate. Naming beneficiaries on all financial accounts (which was the subject of a prior post) also helps tremendously.

Where is the best place to store your estate planning documents?

Trust & Estate Tip of the Day: Where is the best place to store your estate planning documents? Well, that depends on the type of document and your specific circumstances. But one thing is for sure, you want your health care advanced directives to be easily accessible by your designated surrogate(s). Give copies of these documents to your surrogate(s) – which might include hard copies or electronic copies (such as email) or if you feel comfortable then store them in the cloud. Your surrogate may need to make a quick decision and will need to show that he/she has the legal authority to do so. DO NOT store your health care advanced directives in a safe deposit box. They do you no good there. Where should you store your will? Stay tuned