There are many ways to provide for your loved ones in California after you pass. You can set up a POD or TOD account to handle this issue. You can also set up a revocable trust. Each of these arrangements has its own unique set of pros and cons. What works best for you will depend on your unique situation. Here are some of the issues to take notice of.
POD and TOD accounts have special advantages
Transfer on Death (TOD) and Payable on Death) accounts have become so popular in recent times that many people wonder if it’s even worth it to bother setting up trusts. You can use a TOD account to pass stocks, brokerage accounts, and bonds to your beneficiaries as soon as you pass. A POD account is similar but is usually employed to pass handle cash instead of securities.
Perhaps the main advantage of a POD or TOD account is that they will allow you to skip the process of probate. You can easily get such an account at the financial institution of your choice. Banks also tend to offer these accounts.
A revocable trust is easier to enforce
Many people still prefer to use trusts as the best form of asset protection for their beneficiaries. There are several reasons why this is the case. One of the most commonly cited is the fact that trusts allow you to plan ahead for the risk of incapacitation.
If this should occur, you can have your previously appointed trustee come in to handle the affairs of your estate. This may not be possible with a POD or TOD account. With these, it’s better to have a durable power of attorney. Even then, the bank that issued the accounts may contest your choice.