Bank account holders advised to add POD and TOD beneficiaries

Holders of Bank accounts have been advised to add payable-on-death (POD) or transfer-on-death (TOD) beneficiaries to their accounts as the simplest way to leave to heirs any investment in the event of death.

Reverend Edward Randolph-Koranteng, a Banking Consultant explained that beneficiaries under POD are substantially different from traditional beneficiaries.

He educated that a beneficiary selection option was always displayed on the forms for opening a bank account.

"Generally speaking, a beneficiary is someone who would get your account upon your passing. A POD account is a formal name for a "payable on death" bank account.

If you designate someone as a payable-on-death beneficiary, they won't have immediate access to your funds until after your death and also, the designated payable-on-death beneficiary may be changed at any time by you," he added in an interview with the Ghana News Agency.

He noted how the monies of deceased individuals could be lying in accounts without family knowledge of it or even how to claim it.

He said people may avoid probate to save avoidable costs so that assets are passed to beneficiaries in the easiest, shortest, and least stressful manner possible.

"If you have designated someone as a POD beneficiary on your account, all they will need to do to access the funds is present a valid government identification card and a copy of your death certificate when you pass away," he educated.

The Banking Consultant added that anytime a bank learned about a deceased account holder, such accounts are frozen to stop fraud.

The Consultant, who is also the President of Idea Champions Centre said another means of allowing beneficiaries access to decreased funds was the Transfer on Death (TOD) which allowed loved ones to receive money in the event of passing.

He said, regardless of the benefits of Payment-on -death accounts, there are a few problems with a POD Account with the biggest disadvantage being that alternate beneficiaries could not be added to the account.

"The funds in your account are automatically transferred to an estate or will if the person you choose to receive the proceeds passes away before you do.

Multiple beneficiaries might be named to the account to help make up for this disadvantage," he educated.

He added that when loans and taxes must be repaid as part of a larger inheritance after death, a POD account could be challenging for the executor to pay these expenses out of POD accounts and also naming many beneficiaries may make it more difficult to divide the proceeds from complicated financial instruments, such as bonds.

He has thus encouraged the account holder's nominated people they could trust and consider any potential repercussions before such actions are taken.