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Inheritance Taxes And POD Accounts

paoli2
paoli2   |     |   2,227 posts since 2011

Does anyone know how Payable on Death accounts fit in with Inheritance Taxes?  Someone recently told me they aren't considered Inheritances as long as they are not probatable .  Is this correct?  I was told they are taxed at the 67% rate and it just doesn't fit in with anything I have ever known.  Has anything recently changed when it comes to how much Inheritance tax we have to pay if we inherit CDs only?   Is it true it is better to list anyone you want to inherit a CD directly on the CD rather than put them on as a POD?  Which is better taxwise.  I apologize for all the questions but I am now really confused about these matters.  If you know of a link I can use to be educated on the subject, please advise.  Thanks for your help.



Answers
Shorebreak
Shorebreak   |     |   4,078 posts since 2010
"Payable-on-death bank accounts offer an easy ways to keep money—even large sums of it—out of probate. All you need to do is properly notify your bank of whom you want to inherit the money in the account or certificate of deposit. The bank and the beneficiary you name will do the rest, bypassing probate court entirely. It's that simple." For 2013, up to $5.25 million of an individual’s estate will be exempt from federal estate tax, with a 40% tax rate applied to any excess over the exemption amount.

Payable-on-Death (POD) Accounts: The Basics | Nolo.com
paoli2
paoli2   |     |   2,227 posts since 2011
Thanks for coming through for me again Shorebreak and for the Nolo link.  It helped me understand that the old way, in my case, is still the best way for me to use.  It also saves me from having to undo what I already have in place.  I appreciate your also adding the 2013 amount which is exempt from fed estate tax.  I needed to know that to convince some people why I will not be making changes to my accounts.   Much appreciation for the quick reply also.
Cam18
Cam18   |     |   1 posts since 2016
Hi  Shorebreak, think maybe you can help me understand some Certificate of Deposit papers i have, my grandfather passed 2009 and Granny passed 2012. I was able to go through a lot of their items and thought all was said and done! I came across these papers and recently was contacted by a person about a lawsuit settle with different banks  Obvious I need to speak with someone ASAP. these paper need to be turned in stamp by the 14th Nov. yet little curious because they show acct numbers and % and what would be owed to my grandparents, but can't seem to get straight answer but to read this 144 some page bankruptcy court stuff..Can you help a confused Granddaughter Please..ty
Ricochet
Ricochet   |     |   230 posts since 2010
ASAP would be to get to a lawyer .Maybe one in Probate
You got 5 days and 2 are weekend .Get a move on
paoli2
paoli2   |     |   2,227 posts since 2011
BTW, if only one Spouse's name is on the POD CD made out to a DD and the Spouse's DP has to go into a nursing home, can Medicaid use these POD CDs to pay for the institutional spouse's nursing home??  Thanks!