What is a Payable/Transfer on Death Account?
A Payable on Death (POD) account (also known as a “Totten Trust”) is simply a standard bank account where specific person(s) are designated as beneficiary of all funds once the account holder dies. Similarly, a Transfer on Death (TOD) account is generally used to allow a holder of a security (stock or bond) or brokerage account to transfer ownership of the account or security to a named beneficiary upon the owner’s death. The terms POD and TOD are often used interchangeably. POD accounts can be used for many different types of accounts, including bank savings and checking accounts, savings and loan accounts, credit union accounts, certificates of deposit, Treasury securities and savings bonds. There is no need for a formal trust agreement or trustee. The beneficiary named by the account holder has no right to the funds until the account owner dies. The account holder retains full control over the funds during his or her lifetime, and is able to withdraw some or all of the funds and mak