In this Elder Law Minute, Wes Coulson, Illinois and Missouri Elder Law attorney, discusses Transfer on Death or TOD accounts, Payable on Death or POD accounts, and Joint Tenancy accounts, and why they don’t take the place of a will, can result in a very distorted estate plan and possibly end up doing more harm than good.
All of My Assets Have TOD, POD or Joint Tenancy. Do I Still Need a Will?
Hi, I’m Wes Coulson from Coulson Elder Law, serving clients throughout the St. Louis Metro area in both Missouri and Illinois, and this is your Elder Law and Estate Planning Minute. Today I want to talk to you about accounts that sometimes people set up as, what they think is any easy way of avoiding probate, and those are Transfer on Death or TOD accounts, Payable on Death or POD accounts, and Joint Tenancy accounts. I’m not a big fan of any of those and let me tell you why, several reasons.
First of all, they tend not to have a backup plan. They ask who is the designee and there’s a name on that line. Well, if that person dies before you, dies at the same time, dies with special needs, dies having creditors, the money there may be either nobody for that money to get to or it may get to them in a way that going to do more harm than good.
Second problem I have is that they can result in a very distorted estate plan. I had a lady once who thought she had it all figured out. She had her checking account and five $50,000 CDs, one each payable on death to her five children. She thought well, that’s great it’s going to work out even. But, then she went into a nursing home and needed money to pay for it. Well, it didn’t seem like a good idea to cash in all five CDs, so one of them got cashed in. And, guess what, she provided for four of her children whose CDs were still in place, but not the other one.
The third caution is that joint tenancy’s can be outright dangerous. People don’t realize it, but when you add somebody’s name on an account as joint tenant, if anything goes bad for them financially, not just none or half of the money but all of the money in that account can be reached by their creditors. So, you can lose everything in the account.
There are a whole lot better ways of going about this. You need to talk to a good attorney to get them done, but we certainly can help you with that and encourage you to do it. Thanks.
For more information about Estate Planning and Wills, visit these articles:
- Common Estate Planning Mistake #1: Failing to appreciate how assets pass upon death
- If You’re Married and Over 65, Your Wills are Probably Wrong
- Living Trusts vs. Wills: Being Able to Give Informal Direction to Trustees
“Your Trusted Advisor on the Elder Care Journey”
Coulson Elder Law is dedicated to providing families in the St. Louis area with their Elder Law needs. Our practice areas include Asset Preservation Planning, Veterans Benefits, Medicaid Eligibility, Alzheimer’s Planning, Special Needs Planning, Estate Planning and more. We understand the financial challenges you may face as you and your loved ones grow older. At Coulson Elder Law, our clients’ well-being is our number one priority. For immediate help, call (618) 632-7000 or (314) 567-9292, or Contact Us and we will get in touch as soon as possible.