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  • Attorney Bob Mannor, CELA

Navigating Bank Account Beneficiary Decisions

As a trusted elder law attorney for more than 20 years, I've witnessed firsthand the anxieties families experience surrounding financial management for aging loved ones. One frequent question centers around the "Upon Death Beneficiaries" listed on bank accounts – a seemingly simple concept with much deeper implications. Let's demystify this option. Here is some guidance for navigating financial security for Michigan's seniors.


Paid Upon Death Beneficiaries Decoded:


An "Upon Death Beneficiary" or a paid on death designation, allows you to name someone who inherits the remaining funds in your bank account upon your passing. This bypasses probate and simplifies the process for your beneficiary.

Benefits of the Paid on Death Designation:


• Faster access: Beneficiaries receive funds quickly, avoiding the delays of probate court.

• Privacy: Unlike wills, POD designations remain private after your passing.

• Flexibility: You can change your beneficiary at any time without affecting your ownership during your lifetime.

• Debt protection: Generally, creditors cannot access your beneficiaries’ POD funds to settle your debts, unlike with jointly owned accounts.


PODs vs. Joint Ownership:


While seemingly convenient, adding a family member as a joint owner to your bank account comes with drawbacks:


• Loss of control: You relinquish control over account funds, exposing them to potential misuse by the joint owner.

• Liability risk: Both owners are equally responsible for account activity, including debts incurred by the other.

• Estate implications: Jointly owned accounts automatically pass to the surviving owner, bypassing your intended beneficiaries in your will.


Alternatives to Joint Ownership


For older adults who need bill-paying assistance, here are options to consider:


• Power of Attorney: Grant financial decision-making authority to a trusted individual, but carefully define their powers and limitations under the POA granted.

• Representative Payee: A court-appointed representative can manage your benefits and bills if you are deemed incapacitated

• Revocable Living Trust: Enables you to maintain control of your finances and appoint a trusted loved one for bill-paying help only if needed. This offers seamless financial management, and flexibility to modify or revoke the trust as needed.


Seek Expert Guidance:


Choosing the right approach depends on your circumstances and goals. Consulting an elder law attorney ensures that you understand each option's legal and financial implications, and are able to make informed decisions to protect your loved ones and their financial future.


Additional Tips:


• Communicate openly with your family about your financial plans and beneficiary intentions.

• Regularly review your paid on death and power of attorney designations  to ensure they reflect your current wishes.

• Consider creating a living trust for more complex asset management and potential tax benefits.


Remember, proper financial planning safeguards your loved ones and their well-being while providing you with peace of mind. When navigating sensitive decisions, never hesitate to seek expert guidance to ensure that you enjoy financial security and dignity.



Bob Mannor is a Certified Elder Law attorney, certified Dementia practitioner, presenter, author & host of Advice from Your Advocates Podcast. Contact the Mannor Law Group at 810.694.9000.

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