California law regarding pay on death accounts

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California law regarding pay on death accounts

I have a POD bank account with two tax-exempt charities as beneficiaries.

Upon my death, what happens to the funds in the event one of the beneficiaries fails to collect its share of the money?

How long will the bank hold the uncollected funds?

After my death, does my estate executor have the legal right to, as per my express wishes, select another tax exempt beneficiary should one or both of the beneficiaries designed in the original POD no longer be tax-exempt?

Asked on February 8, 2018 under Estate Planning, California

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Does your bank allow for alternate payees as designated beneficiaires?  If so, then you can name an alternate should the first charity not be in existence when you pass, becuase so long as they exist, it is theirs.  The bank will hold the account as long as the law in the state allows and then if it is dormant it could be considered an uncollected fund under the state law.  If you want the Executor to control the pay out of the funds then the Estate would be the beneficiary but then you have tax implications. I would suggest sitting down with an estate planner for this.  Good luck.


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