Payable on Death (“POD”) Bank Accounts &
Transferable on Death (“TOD”) Securities
- What Is a Payable on Death Account or Transferable on Death Security?
- A Combination Joint Tenancy + POD Account or TOD Security
- Administration of POD Accounts and TOD Securities
What Is a Payable on Death Account or Transferable on Death Security?
Payable on death (“POD”) accounts and transferable on death (“TOD”) securities are creatures of statute. The Washington legislature created by statute what most parents want when they “put their children’s name on the title” with a joint tenancy:
- The transferor (eg, the parent) has the exclusive right to the property during his/her life, and
- At the death of the transferor, the property passes by right of survivorship to the designated beneficiaries (eg, the children) outside of probate and (generally) independent of any Will.
[The example of parent and child is used here only because of its popularity for POD accounts and TOD securities, which can be be used by any two of more persons, related or not.]
For POD Accounts: RCW 30.22.040(9). For TOD Accounts: RCW 21.35.005(1).
They work well for the property for which they are authorized:
- POD accounts are limited to financial accounts. RCW 30.22.100(4) By statutory definition, a “financial account” is “a contract of deposit between a depositor or depositors and a financial institution;” including:
- A checking account,
- A savings account,
- A certificate of deposit,
- A savings certificate,
- A share account,
- A savings bond, and
- “Other like arrangements.” RCW 30.22.040(1)
- TOD accounts are limited to securities. RCW 21.35 By statutory definition, a “security” is a share, participation, or other interest in property, in a business, or in an obligation of an enterprise or other issues, and includes both a certificated and an uncertificated security as well as a securities account. RCW 21.35.005(9)
The problem is that those are the only properties for which POD or TOD may be used. For example, neither POD nor TOD may be used for:
- Tangible personal property, such as cars, boats, planes, RVs, trailers, valuables, collections, etc., or
- Real property.
POD accounts and TOD securities work (result in the desired probate avoidance) for financial accounts and securities, respectively, AND FOR NOTHING ELSE.
Side-bar: POD accounts are also known as “Trust”, “Totten Trust”, or “In Trust for” accounts.
A Combination Joint Tenancy + POD Account or TOD Security
A combination joint tenancy + POD account or TOD security is possible. The joint tenants have the exclusive right to the account or security until the death of the last of them to die, at which time the account or security passes to the designated POD or TOD beneficiary, who takes as sole owner (or POD or TOD beneficiaries, who take as tenants in common). For POD accounts: RCW 30.22.100(4); for TOD securities: RCW 21.35.035.