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Using Payable-on-Death Accounts and Transfer-on-Death Deeds to Avoid Probate

Probate in South Dakota can be a complicated and drawn-out process if the estate has a net worth of more than $50,000. Fortunately, there are methods that allow even wealthy individuals to save their heirs the delay and trouble of estate administration. Two such methods that are particularly advantageous are payable-on-death (POD) accounts and transfer-on-death (TOD) deeds.

A POD account is easy to create. You simply notify your bank and name a beneficiary who will inherit the money in the account on your death. The only hitch is that you may not name more than one beneficiary, so you might need to set up more than one POD account if you want to benefit more than one heir.

During your lifetime, you may freely deposit as much money as you want into the account, withdraw as much as you want and even empty the account completely. You can also change the name of the beneficiary or convert the POD account back to an ordinary account. Only when you die does the beneficiary acquire any rights to the POD account. He or she can then claim all the money in the account by presenting the bank with proof of identity and a copy of your death certificate.

Another useful feature of a POD account is that it increases how much of your deposits in a single bank are FDIC-insured. Normally, it would only insure a maximum of $250,000 in all your accounts. However, the FDIC treats the POD account as though it were owned by another depositor, and so separately insures each one for $250,000.

A TOD deed is similar to a POD account but is used only to convey real estate. Like any deed, you must sign the TOD deed and record it in the Register of Deeds Office of the county in which the real estate is located. However, the person to whom the deed conveys the property has no right to take possession until you die. In the meantime, you are free to revoke the TOD deed and/or sell the property to someone else at any time.

If you would like to consider a POD account or TOD deed, Anker Law Group, P.C., located in Rapid City, South Dakota, is ready to help you understand and take advantage of them. And if you already have one, our estate administration attorneys can help make sure your successor gets the benefit that you intend. Call us at 605-519-5967 or contact us online to schedule an appointment.

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