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POD Accounts Have Drawbacks

A b a n k e m pl o y ee 4. Even if the POD ben-


struck up a conversation eficiary is over 18, you
with me last week, may not want the
questioning why some- beneficiary to get the
one whose estate is not money outright. The
taxable would need a beneficiary may have
Living Trust. Wouldn’t it creditors just waiting to
be simpler to just make leap on his inheritance
all assets Payable on or the beneficiary may
Death (POD), so the not be fiscally prudent,
funds pass automati- or you may want to place
cally to beneficiaries? It some strings on when
would avoid probate, Joseph S. Karp, C.E.L.A. the funds are received
too, she pointed out. Her question is and how they are used. For example,
understandable, and a common one, you may want the beneficiary to
too. But, as I explained to her, there receive funds only when reaching age
are often good reasons to avoid POD 30. Or you may want the funds used
accounts and opt for a trust instead. for certain purposes, like education
Here are just a few: and medical expenses.
1. A trust is usually the best approach In all the examples above, you

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if you want to leave money to some- could use a Will, specifying that upon
one who is disabled. Obvi-
ously, the money must be Listen to Joe Karp and Anita Finley on
managed by someone for Saturday, February 19, 2011 from 7:00-7:30 AM

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the person’s benefit. More- on WSBR 740AM and on the
over, inheriting a lump sum Internet at www.wsbrradio.com.
could jeopardize the per-
son’s eligibility for public benefits. your passing a Testamentary Trust is
2. If a person’s estate passes auto- established. But when your funds are
matically to all the children via passing through a Will, probate
POD accounts, it leaves too many will be required. That’s among the
Indians and no chief. That’s a recipe reasons a Living Trust is almost
for family chaos. There will be always the better tool. I think this
funeral expenses, income tax, and clears things up for my friend at the
other outstanding obligations. Will bank, and for you, too.
all the kids pitch in a part of their Joseph S. Karp is a nationally certified
inheritance to pay the bills? What if and Florida Bar-certified elder law attor-
one of them decides he’s keeping all ney (C.E.L.A.) specializing in the practice
his money and refuses to participate? of Trusts, Estates and Elder Law.
With a trust, all the money goes into His offices are located at 2500 Quantum
Lakes Drive, Boynton Beach (561) 752-4550;
one pot, and you’ve put someone in
2875 PGA Blvd., Palm Beach Gardens
charge to pay the bills and distribute (561) 625-1100; and 1100 SW St. Lucie W.
what’s left over. Now, that’s simpler. Blvd., Port St. Lucie (772) 343-8411.
3. If a minor child receives funds POD, Toll-free from anywhere: 800-893-9911.
a court guardianship is required to E-mail: KLF@Karplaw.com or website
appoint someone to handle the www.karplaw.com.
money. The child’s parents do not Read The Florida Elder Law and Estate
automatically get to manage the Planning Blog at
child’s inheritance. www.karplaw.blogspot.com.