Sign up for our monthly Lifestyle newsletter for entertainment news, healthy living tips and more.
by Michael T. Palermo, JD, CFP, AARP, December 2007
My father’s will named me executor and divided his estate equally among my brother, my sister, and me. So I was surprised to find he had a bank certificate of deposit payable on death (POD) to me alone. None of his other accounts was POD. Someone at the bank probably suggested he use the POD designation as a way of avoiding probate. Dad did not hear well, and he may have just nodded when the bank employee made the suggestion. I knew very well, however, that my father did not intend to give this CD only to me. But by using a POD instrument, that’s precisely what he did. Unlike his other property, the CD was not subject to probate.
I would have been within my rights to pocket the money—with or without the knowledge of my brother and sister. They could have then gone to court, arguing that a mistake had been made—that my father lacked the required intent to make a gift of the entire CD to me. That’s the truth of the matter, yet it would have been almost impossible to prove.
Instead, I cashed in the CD and gave one-third of the proceeds each to my brother and sister. We’re a close family, so the decision was automatic, but I’m sure Dad didn’t buy that CD because he was counting on me to be fair and share the money—he just made a mistake. Beware of this kind of situation; the potential for a family feud is obvious.
From “AARP Crash Course in Estate Planning: The Essential Guide to Wills, Trusts and Your Personal Legacy,” by Michael T. Palermo, JD, CFP, 2005, pp. 20-21.
Please leave your comment below.
You must be logged in to leave a comment.
Visit the AARP state page for information about events, news and resources near you.
Up to 25% off device and online privacy protection plans
Help from experts & resources to get started
No-fee personal loans
AARP members receive exclusive member benefits & affect social change.
You are leaving AARP.org and going to the website of our trusted provider. The provider’s terms, conditions and policies apply. Please return to AARP.org to learn more about other benefits.
Your email address is now confirmed.
You'll start receiving the latest news, benefits, events, and programs related to AARP's mission to empower people to choose how they live as they age.
You can also manage your communication preferences by updating your account at anytime. You will be asked to register or log in.
In the next 24 hours, you will receive an email to confirm your subscription to receive emails
related to AARP volunteering. Once you confirm that subscription, you will regularly
receive communications related to AARP volunteering. In the meantime, please feel free
to search for ways to make a difference in your community at