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What is the the difference between "ITF" and a "POD"?
by Ken Golliher, BOL Guru

QUESTION: What is the the difference between "ITF" and a "POD"? I was always trained that the difference is in title only. The conditions are the same. No signing authority and may pay-out on the death of the accountholder.

ANSWER: Account ownership and acceptable titles are always controlled by state law; the Arizona answer may be different than the Maine answer. This response is consistent with the laws in all the states where I present deposit administration seminars.

The ITF (in trust for) account has a trustee. The POD (payable on death) account has an original payee. Both the trustee and the original payee actually own the funds during their lifetime and their SSN's are used for information reporting. The beneficiary has no interest in the account until the owner dies. Then, the funds pass to the beneficiary by operation of law, without regard to the terms of the will. Deposit insurance coverages are the same for both account types.

Even though the accounts work the same way, some banks will not use the ITF version. Their experience is that customers using this language sometimes incorrectly believe they have created a trust. On the other hand, they believe everyone understand the true implications of "payable on death."

First published on 3/4/02

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