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Are the terms Payable on Death (POD) and Beneficiary interchangeable?
by Ken Golliher, BOL Guru

Question: Are the terms Payable on Death (POD) and Beneficiary interchangeable? Are they the same?

Answer: Let's assume the account title is "Alexis Doe, POD, Frances Doe."

"POD" is the instruction; i.e., when Alexis Doe dies, she wants Frances to have the money. That makes Frances the "beneficiary." I would not say that makes the terms synonyms.

Under the laws of most states, I do not believe simply naming Frances as the "beneficiary" on a signature card without using the "POD" designation would assure that she gets the funds. It might create enough confusion to land everyone in court, but I do not believe the answer is obvious.

However, if the documentation is more detailed, such as an IRA agreement, naming Frances as the "beneficiary" is adequate. IRA agreements contain considerable information talking about beneficiaries, their rights, their responsibilities, etc. They normally do not use "POD." However, there, I would say the intention of the owner is obvious.

First published on 12/2/02

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