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Household Finances

POD Question

16 years ago

I will be calling my accountant this week, to make sure I get the right answer, for my circumstances and my state, but I'm just curious if anyone has been in this situation themselves.

If you acquire money through a POD (payable on death) account after someone dies, do you have to pay income taxes? I know it's not considered part of the estate, with that designation, so there are no estate taxes on it, but does if turn into income for the person who receives the money?

Thanks.

Comments (4)

azzalea
Original Author
16 years ago
Don't want this question hanging up here forever.

In case anyone else comes across this situation, according to my accountant, there's no income tax liability. The money just transfers to you, and then from that point on, you're responsible for the taxes on any interest you might earn from investing it.

Good to know.
Jonesy
16 years ago
You need to see and estate lawyer. They usually counsel with you free the first time. I talked to a lawyer about what I have done (TOD & POD) and he approved. He said it was better than what he was going to suggest. since I would be giving it away, not receiving, I didn't think to ask him that question.
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joyfulguy
16 years ago
"TOD" being "Transferable on Death"??

o j
azzalea
Original Author
16 years ago
Yes, sometimes you see POD (payable on death) and sometimes TOD (transferable on death). Same thing, from what I'm seeing.

In this case, I don't think an estate lawyer is necessary--that would be closing the barn door after the horse left. My mother died a month+ ago. The POD funds have already passed to her 4 children. My question was on our behalf--since this money isn't part of the administered estate, I wanted to know how it affected the beneficiaries (me and my siblings) taxes for the year. Answer according to my tax accountant--it doesn't.

I, too, see the POD as a very good idea and have started adding POD names to my accounts and CD's.

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