10.5 Pod and Tod Accounts

• Library: Estate Planning in Virginia (Virginia CLE) (2018 Ed.)

10.5 POD AND TOD ACCOUNTS

10.501 Payable on Death Accounts.

A. Definition. Section 6.2-604 of the Virginia Code defines a payable on death (POD) account as a contract of deposit of funds between a depositor and a financial institution payable on request to one or more persons during their lifetimes, and on death, to one or more POD payees. ⁹⁸

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United States savings bonds may also be titled in POD form so that upon the death of the registered owner, the bond will be paid to the beneficiary named at death, who is recognized by the Treasury as the sole and absolute owner. The rules described under multiple-party accounts in paragraph 10.404 above apply to all Virginia POD accounts.

B. Operation.

1. Ownership. A POD account belongs to the original payee during his or her lifetime, not to the POD payee or payees. ⁹⁹ The original payee can change the POD payee or form of the account at any time before his or her death. ¹⁰⁰ Original payees who are spouses own a POD account equally, and nonspouse original payees own a POD account in the same proportions as they have made net contributions to the account, unless in either case there is clear and convincing evidence of a different intent. ¹⁰¹

2. Death. On the death of one of two or more original payees, the account balance belongs to the survivor, unless there is clear and convincing evidence of a different intention when the account was created. On the death of the sole original payee or upon the death of the survivor of two or more original payees, the account balance belongs to the POD payee or payees (without survivorship as between them, unless so provided), or the survivor of them. ¹⁰² A POD payee designation cannot be changed by will. ¹⁰³

3. Creditors. Creditors of the original payees can attach the POD account in accordance with the payee's respective interests. ¹⁰⁴ POD payees are liable to the original deceased payee's personal representative to

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the extent necessary to discharge claims and charges against the decedent's estate in the same manner as survivors under multiple-party accounts. ¹⁰⁵

10.502 Transfer on Death Accounts.

A. Definitions. Sections 64.2-612 through 64.2-619 of the Virginia Code govern the registration of a security or security account to provide a transfer on death (TOD) to a designated beneficiary or beneficiaries. "Security" means a share, participation, or other interest in a business or in an obligation of an enterprise or other issue, and includes a certificated or uncertificated security in a security account. A "security account" includes a reinvestment security account...