If all assets are in CD’s, will POD work in place of Trust to avoid probate? Any downside?
by admin ~ July 12th, 2008 . Filed under: Personal Finance .
Fendall W asked:
Elderly Mother lives with us and has All assets in CD’S . We are being hounded to set up Trust, but seems like a simple Payable on Death attachment to the CD’s would suffice and not involve an attorney.
She has no credit cards and no debt
Francesco Zwickl
Elderly Mother lives with us and has All assets in CD’S . We are being hounded to set up Trust, but seems like a simple Payable on Death attachment to the CD’s would suffice and not involve an attorney.
She has no credit cards and no debt
Francesco Zwickl
July 12th, 2008 at 4:21 am
im sorry refraz!
July 12th, 2008 at 6:13 pm
You may be confusing payment with ownership.
While the payment goes to you, you are still responsible for probate process.
Example: If mother dies and leaves $100K of debt, and has a CD worth $100K, the payment goes to you, but in settlement of probate (and final tax return) you owe the estate the $100K. A trust, on the other hand, acts as a financial entity and taxes are due only on the payments drawn from the trust.
If you are dealing in small numbers (ie under $100K) than it’s probably no big deal. But, POD does not absolve you from either probate or tax liabilities. It just makes it easier to get the money quickly (ie for burial).
Good Luck
ED
July 14th, 2008 at 9:51 pm
look unless you are talking about a lot of money over 100k do no waste the money setting up a trust fund — either way some one will have to settle debts (if any ) and pay taxes — just keep her happy and hope she lives many more years!!!