How to Update Your POD Beneficiary
Have you assigned a POD beneficiary to your account? Whether you already have one or not, it’s important to regularly review and update the beneficiary information associated with your account. Life is unpredictable, and circumstances change. Births, marriages, divorces, and even the loss of a loved one can affect your life and financial situation. In this blog, we discuss the importance of having a beneficiary and how you can ensure your Launch CU account is up-to-date.
Key Features:
- What is a POD Beneficiary?
- How does a POD bank account work?
- Why should I update it?
- When should I update it?
What Is a Payable-on-Death Beneficiary?
Appointing a payable-on-death (POD) beneficiary allows you to choose one or more people who will inherit the funds in your account after you pass away. Having a POD bypasses the need for a lengthy probate process, and your bank assets are transferred directly to your beneficiary. Your beneficiary can be an individual, a group of individuals, nonprofits, businesses, organizations, or trusts.
How Does a Payable-on-Death Bank Account Work?
According to the Florida Statutes, the distribution of funds among beneficiaries follows an equal share principle (excluding IRA accounts). For instance, if you have $10,000 in a POD account with two beneficiaries, each is entitled to $5,000 in the event of your passing. If only one of the beneficiaries is still alive, the surviving beneficiary will inherit the full $10,000.
Why is it important to update beneficiary information?
Failing to update your beneficiary information can lead to complications and unintended consequences. By keeping your beneficiary information up to date, you provide financial security for your loved ones. This can be especially important if you have dependents who rely on your support. If you pass away and have not named a beneficiary, your assets typically go through a legal process called probate. This process often falls on family members and burdens them with a significant amount of paperwork and expenses. Ensuring a payable-on-death (POD) designation is in place can save your survivors from financial stress while grieving your loss.
When should you update beneficiaries?
Updating your bank account beneficiary may seem like a small task, but its impact can be significant. By taking time to review and update this information regularly, you’re not only ensuring a smooth transfer of assets but also providing peace of mind for yourself and your loved ones. Any time you experience a life event, such as marriage, divorce, birth of a child, or death, you should review and update your beneficiaries.
To check your designated POD beneficiary, visit any Launch CU branch or call the Contact Center at 800-662-5257, option 0. To assign or update an account beneficiary, a POD Account Card must be signed. IRA Plan beneficiaries are designated separately and require a separate IRA Beneficiary Designation form.
FAQs
Do I need to notify my beneficiary when I name them on my account?
No, you are not required to notify your beneficiary, but it is often helpful so they know what to expect and can prepare if needed.
Can a POD beneficiary access my account while I’m still alive?
No. A POD beneficiary has no rights to your account while you are living. They only gain access to funds after your passing.
Can I name a minor as a POD beneficiary?
Yes, but if the beneficiary is a minor at the time of inheritance, a guardian or custodian may need to be appointed to manage the funds until the child reaches legal adulthood.
Does a will override my POD beneficiary?
In most cases, no. POD designations typically override instructions in a will, making it essential to keep your POD information accurate.
