Elizabeth, NJ -The Union County Surrogate James S. LaCorte has issued a warning regarding Payable on Death (P.O.D.) bank policy for Union County residents; with a special emphasis to seniors. Payable-On-Death means adding a beneficiary to your bank account. In the event of your death, the beneficiary can access the money with a death certificate or proof of death, without a judge’s signature, probate proceedings, attorneys, or anyone’s permission.
Earlier this year the Surrogate issued a similar warning regarding the practices of out-of-state banks with branches in New Jersey in relation to safety deposit boxes. Many of these institutions may not follow New Jersey practice when it comes to releasing certain items from those boxes when the owner of the safety deposit box dies. Some of the same institutions are exhibiting a similar lack of understanding in the area of P.O.D. accounts.
“I encourage anyone with a POD account to go to their bank, discuss and be clear on what the policy is regarding these accounts,” Surrogate James LaCorte said. “Unfortunately, some large out-of-state banks with New Jersey branches are requiring loved ones to acquire a Surrogate’s Court document before they will pay over the proceeds of these accounts. In the state of New Jersey that document is not required.”
P.O.D. accounts are, in fact, a contract between the account owner and the bank. The bank agrees to pay the proceeds of the account to the payee on the account upon the submission of competent proof of death of the account holder. A certified death certificate is more than adequate proof of death. However, in many instances, these large out-of-state banks with branches in New Jersey make these transfers much more difficult in times of hardship.
There are times when all of the funds cannot be released such as whenever the payee is not a son, daughter, spouse, grandchild, etc. A tax waiver is required for all other payees.
As in the case of safety deposit boxes, sometimes “bigger is not better.”
If you desire to set up a P.O.D. account, talk to a smaller local bank first; they may be more accommodating.
A local bank may make the process easier for your beneficiary, resulting in an orderly transition of your assets at a time when your family will need it the most.
For more information on services provided by the Surrogate’s office, please call 908-527-4280.
For more information on any Union County press release, please contact Sebastian D’Elia, Communications Director for the County of Union, or a designee listed at the top of this press release. Please join the County of Union online at www.ucnj.org, on Facebook at www.ucnj.org/facebook, and on Twitter athttp://twitter.com/countyofunionnj.
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