Does a Will Override a Payable on Death?

You can use a variety of mechanisms to arrange for the transfer of your assets to your heirs after you die. Many people write wills that contain explicit details on the settlement of an estate. However, if you name someone as a pay-on-death (POD) beneficiary on one of your accounts, your assets are normally disbursed to the POD beneficiaries regardless of the instructions contained within your will.


POD Accounts

When you add a POD beneficiary to your bank accounts, you turn your personal account into a type of revocable living trust account. As with any revocable trust account, you can make changes to the account at any time, and you have the right to add or remove beneficiaries. However, the POD designation takes effect as soon as you add the beneficiaries to your account. Thereafter, the named parties have a legal right to close your account and access the funds upon your death.

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Unlike a revocable trust, a will does not take effect until you die. At that point, your heirs or representatives of your estate must present a copy of the will to the local probate court. A judge holds hearings, and your creditors and other interested parties such as your relatives have the opportunity to make claims on your assets. Additionally, people also can submit copies of other wills that you wrote to the court. The judge must decide whether to accept the validity of the will. Depending on the outcome of the probate case, your will may never take effect.


While a POD designation normally takes precedence over a will, many states have laws that allow your heirs and creditors to challenge the validity of a POD designation in court. If the judge accepts the validity of the claimant's dispute, the judge can order your bank to freeze the account so the POD beneficiaries cannot close it. The judge could, in theory, overturn the POD designation and divide the assets in accordance with your will. However, such situations are unusual, and, in most instances, POD accounts are not treated as part of your estate.



Some people who only own cash assets set up all their bank accounts with POD beneficiaries and do not write a will. Other people create formal revocable trusts and transfer ownership of all their assets, including their bank accounts, into these trusts. Consequently, many people with POD accounts and trusts have no need for wills. Nevertheless, many trust attorneys recommend writing a so-called "pour over will." In this will you include general directions about the settling of your estate in case you accidentally omitted any of your assets from your trust or failed to add PODs to any of your bank accounts. The pour over will simplifies the probate process if any such assets exist.