Ensure Your Loved Ones’ Future: Designate Payable on Death (POD) Beneficiaries

Secure Your Money’s Future: Designate Payable on Death (POD) Beneficiaries

You can’t predict unexpected events, but you can plan for them. Establishing Payable on Death (POD) is an easy way to make sure your money gets to those you intend it to—no probate, no hassles. And, it may help prevent your accounts from being claimed by the state after your passing.
 

What Is a Payable on Death Allocation, and How Does It Work?

In short, POD is a designation you set on your financial accounts that ensures your beneficiaries get quick access to the money you leave behind when you’re deceased.

Beneficiaries can include family members, friends or even a charitable organization you love. While you’re alive, your accounts are your property and are inaccessible to your named beneficiaries. But with POD, you have the assurance that your hard-earned money ends up going to those you’ve chosen after you pass—without getting tied up in unnecessary litigation or other hiccups.

Why Is It So Important to Designate POD Beneficiaries?

Making plans for what happens after you die can be scary and uncomfortable. But, the unexpected happens. So, it's important to have your affairs in order as soon as possible to make sure your money goes where you want it to when the time comes.

Important: Distributions to POD beneficiaries generally precede distributions under a will. That’s why it’s recommended that you review your POD beneficiaries at least once a year and update them as necessary.

Escheatment

Escheatment is the process through which unclaimed accounts are transferred to the state where they're held, and the state becomes the custodial holder of the account. This can happen if there has been no account activity within a specified time determined by the state. A joint owner or POD designation will help you avoid this.

Once an account is escheated, you or your beneficiaries will need to contact the state if they wish to reclaim the funds from the accounts. Fortunately, there are several websites where a member can search for these funds nationally or by the individual state—for example, MissingMoney.com or Unclaimed.org. Each state has its own requirements for claiming unclaimed property, which may involve completing a claims form and providing personal information to verify ownership.

The best game plan is to set up POD beneficiaries on your account as soon as possible to help avoid escheatment altogether.

Which Accounts Can I Assign POD Beneficiaries To?

You can assign a POD beneficiary to your Navy Federal accounts, including:

• Checking accounts
• Savings accounts
• Money market savings accounts
• Jumbo money market savings accounts
• Share certificates

*Note: Individual Retirement Arrangements (IRAs) have their own beneficiary assignments. IRA beneficiaries can be added or modified by completing and submitting the Designation of Beneficiaries for IRA Plan form NFCU 584.

How Do I Establish POD Beneficiaries?

Designating your POD beneficiaries to a new or existing account is simple. Once you’ve decided who you want your money and assets to go to upon your death, complete all sections of the Payable on Death (POD) Designation form NFCU 250 and return it to us in one of the following ways:

• Sign in to your account and attach it in an eMessage
• Fax it to us at 703-206-3724
• Mail it to us at PO Box 3002, Merrifield, VA 22116-9887
• Visit a local branch and submit it to a member service representative

As a blanket measure, you can assign POD beneficiaries to all your eligible Navy Federal accounts, or just to individual accounts, whichever you prefer. If you like, you may designate multiple beneficiaries, and once you designate them, you can elect the share amount of your choosing for each POD beneficiary. You can change any of your beneficiaries and the allocation percentages at any time free of charge.

If you’re opening a certificate account online, you can assign PODs at that time without having to fill out a separate form.

Share Insurance Coverage

POD accounts are insured separately from your other Navy Federal accounts, and you’re insured for up to $250,000 per beneficiary.

Insurance coverage examples:

Individual POD Account
Account name: John Doe
Beneficiary: Granddaughter
Amount insurance coverage:
1 owner x 1 beneficiary = $250,000

Joint Owner POD Account
Account name: John Doe
Primary owner: John Doe
Joint owner: Susan Doe
Beneficiaries: Son and daughter
Amount insurance coverage:
2 owners x 2 beneficiaries = $1,000,000

For more information about share insurance coverage provided by the National Credit Union Administration (NCUA), please visit mycreditunion.gov.

Are POD Accounts Taxable?

Yes. The money in a POD account is considered part of the owner's estate and may be taxable. The POD beneficiaries may be liable for state inheritance taxes. POD accounts that are part of large estates may also be subject to federal estate tax, which may reduce the amount the beneficiary receives. Consult with your tax advisor for more information on this topic.

Got Questions?

If you need further guidance, we have a friendly, dedicated team who can help you take the guesswork out of tough-to-navigate issues like setting up your POD accounts. We’re always here to help with your financial concerns. Even better, we’re available onsite in more than 355 branches or by phone nationwide. Connect with us by visiting our Contact Us page.