`Designated' Bank Account Can Help Avoid Probate
Michael Ferry Legal Services Of Eastern Missouri, St Louis Post-Dispatch (MO)
Q: My uncle wants to put my name on a bank account he has, so that when he dies the money in the account goes to me. He was going to make it a joint account, but I told him I didn't think he had to. Isn't there some way he can do what he wants without a joint account? If so, will it cost him anything? Will the bank charge anything? Will there be any legal fees? Will the money have to go through probate?
A: Your uncle can make sure the money in the account goes to you, when he dies, by making a "transfer on death" direction to the bank. The bank will then designate the account with words such as "transfer on death to. . . " or "payable on death to. . . " ("TOD" or "POD").
If the account is properly designated in this way, then upon your uncle's death, you'll become the owner of the funds in the account by operation of law. The funds won't have to go through probate.
I wouldn't expect this to cost anything to you or him. I've never heard of banks charging to designate an account TOD or POD, although banks are becoming very creative at finding ways to charge fees. Check with the bank. If it charges a fee, I suggest that your uncle look for another bank.
This is not the sort of thing you need a lawyer's help with, so there should be no legal fees. Also, no consideration is needed to make effective the designation or later transfer of funds.
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