We have a deposit account that is a Payable on Death account. The bank was then presented with a will associated with account holder of the POD account. Which do we honor, the POD account or the Will that states all funds are to go to the estate of the deceased account holder?

Yours is a question of state law. Your profile does not say what state you are in or I would move your question to that state's forum.

As a matter of black letter law, most multiple party account statutes indicate that account ownership passes by operation of law eo instante at the moment of death; i.e. it doesn't make any difference what a will does or does not say, the money belongs to the survivor or POD beneficiary.

Ask your bank's legal counsel.

To add to this discussion and not to counter anything that Ken has said, the will is nothing more that several sheets of paper with a purported signature on it, perhaps stapled together in a fancy package that attempts to make it look official. It has no significance to you, the banker. And it, by itself, has no legal force or effect.

Absolutely.

There is never any reason for a banker to read someone's will. Probating the will, reading it, then carrying out the instructions is the personal representative's job. The bank's only questions are whether the personal representative has been duly appointed and whether it must turn the assets over to him or her, not what he or she is supposed to do with them.

One additional note on the POD designation, just to drive home the importance of knowing the effects of state law. In at least one state (Oklahoma), a POD designation of a former spouse can be challenged. In Oklahoma, if the account owner and the POD beneficiary are divorced after the POD designation is made, the POD designation is not reaffirmed after the divorce, and the account owner and beneficiary don't remarry one another, the POD designation is void upon the account owner's death.