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How POD Accounts Work When It Comes to Idaho Probates

By Lane V. Erickson, Idaho Estate Planning Attorney

The Racine Law Office is a premier Idaho estate planning firm that has assisted clients for over 70 years and completing their own customized Idaho estate plans. We have also helped surviving family members administer probate proceedings and have assisted with trust administration’s as well. Through all this time we have advised numerous clients in how to set up their Idaho estates in a way that will best provide for their loved ones and family members after they have passed. Whenever we have done this, the issue of bank accounts and retirement accounts always comes up because it is a major part of most individuals’ belongings while they are alive. Inevitably, during this process, we talk about what are commonly known as payable-on-death accounts which most people call PODs.

Our team of Idaho estate planning attorneys work together to help clients create a customized estate plan that will meet their individual needs. We also help families complete probate proceedings for family members or loved ones that have passed away. Both of these often include dealing with PODs. Consisting of partners Randy Budge and Lane Erickson and attorneys Nate Palmer and Dave Bagley, our team works together to find the best solutions possible for each individual client’s estate plan or probate needs. We recognize that no two individuals are exactly alike. Because of this, our goal is not to use a cookie cutter approach but rather to learn of each client’s individual needs and then create customized estate planning documents or probate filings that will best meet those needs.

When it comes to POD accounts we often provide specific guidance and direction to our clients depending on what accounts are involved. Many of our clients are surprised to learn that in fact they or their loved ones have POD accounts even though they didn’t know it. If you are concerned about POD accounts and how they will be handled through your estate or through probate proceedings, here are three things that you should know that may help you.

The Types of POD Accounts that may Exist?

As was set forth above, a POD account is commonly known as a payable-on-death account. While these types of accounts are most commonly understood to be bank accounts, they don’t have to be. Other types of POD accounts that often exist include 401k retirement accounts, traditional IRA accounts, Roth IRA accounts, and sometimes pensions or other retirement benefits or accounts. The key here is whether the account allows the owner to list a beneficiary on what is usually known as a designation of beneficiary form.

When it comes to most retirement accounts, the designation of beneficiary form will control who the account is distributed to when the owner passes away. The reason for this is because almost all retirement accounts are individually owned. In other words, there cannot be a joint owner on these accounts. This simplifies matters when a person who owns such account passes away.

The thing to understand is that the designation of beneficiary form will control distribution of any monies that are in a retirement account. In other words, it really doesn’t matter if your last will and testament says some specific individual get your 401k account or your IRA account if you have filled out a designation of beneficiary form that specifically names an individual. When a designation of beneficiary form exists, that controls over anything you put into your last will and testament. The reason for this is because retirement accounts are administered under a third-party contract. The party that administers the 401K or other retirement account is obligated to follow the terms and conditions of the contract, including instructions left in a designation of beneficiary form. For this reason, any individual or groups of persons you list as beneficiaries on such a document will legally control the distribution of the money from those retirement accounts.

How do POD Bank Accounts Work in Idaho?

The next thing you need to understand is that POD bank accounts are handled in a different way than the retirement accounts discussed above. The reason for this is because often bank accounts have joint owners listed in addition to a listed POD beneficiary. Because of this, things can get a little trickier with bank accounts.

Specifically, Idaho law controls how bank accounts are held and administered after a person’s death when they are designated as a POD account. Idaho Code §§ 15-6-101 et seq., is the specific set of statutes that controls these types of POD accounts. The main reason these accounts are handled differently than retirement account is because banks and other financial institutions want to have an assurance that they are not going to be sued for distributing monies to a POD when a request for payment is made. The statues provide specific instructions and guidance to joint account holders, POD beneficiaries, and financial institutions such as banks.

These statutes indicate that an individual who is listed as a joint account holder or owner has a right to withdraw any deposits they have personally made into the account before distributions are made to a listed POD beneficiary. Additionally, these statutes provide a way for the decedent to leave written instructions about how the accounts are to be handled even when there are joint account owners and other listed POD beneficiaries. When a distribution is made to a POD beneficiary it is done outside of any probate proceedings. The law in Idaho considers these distributions to be made pursuant to third party contract agreements similar to those described above with retirement accounts.

As experienced Idaho estate planning attorneys, our team is qualified and experienced that can help you through any questions you have concerning any POD designations that are made by there by yourself as a part of your own estate plan, or by a family member or loved one who has passed away. We have helped numerous clients with of these questions and we are confident we can help you too.

Are There any Potential Problems in Using POD Bank Accounts?

Even when distributions are made outside of a probate proceeding through a POD beneficiary designation, there are other restrictions that apply. If making such distributions reduces the estate to the point where creditors cannot be properly paid, the recipient or the POD beneficiary may be required to pay the creditor from the distribution made from the POD account. Again, this is controlled by applicable Idaho statutes. The reason for this is that under normal circumstances bank accounts are considered property of the estate subject to creditors’ claims. This is not true of POD designations that are made on retirement accounts which fall completely outside of any probate proceedings. Essentially, when it comes to retirement accounts, any monies contained therein are not considered part of the estate of the decedent.

Other problems may arise in addition to those mentioned above. If there are other possible joint account owners, any distributions made to a POD beneficiary may be subject to the claims of ownership made by the joint account owner. In other words, owners have a right to receive their distributions before any listed POD beneficiary.

Because a number of problems can arise when dealing with POD beneficiaries, we often suggest to our clients that they seek legal advice before distributions are made. Should you have any questions or concerns about any POD accounts we would be happy to assist you too.

Enlist an Idaho Estate Planning and Probate Attorney to Help You

Our experienced Estate Planning team of attorneys can help you and your family with your Idaho estate plan or with your probate needs. Whether you are seeking your own customized Estate Plan or need a Probate for a loved one who has passed, we are available to discuss your options and answer your questions at an initial consultation. Call us toll free at 877.232.6101 or 208.232.6101 for a consultation with the Racine Olson team. You can also email us directly at We will answer your questions and will help you solve your Idaho Estate Planning and Probate problems.

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