Chayet & Danzo, LLC

Call for a Free Initial Consultation

Direct 303-872-5980
Toll-Free 888-472-1088
Email Us

Compassion, talent and dedication:
guiding colorado families and Their Trusted Advisors During Times of Need

Designating beneficiaries of pay-on-death accounts in Colorado

Colorado enacted new legislative changes concerning distributions to beneficiaries of amounts on deposit in pay-on-death (POD) accounts at financial institutions. Upon the death of the sole or last account holder of a POD financial account , the new law permits the non-equal distribution of funds from accounts which have two or more beneficiaries.

Prior law required that accounts with POD designations naming two or more beneficiaries must be paid to the surviving beneficiaries in equal shares. The account owner could not legally designate different proportions to each beneficiary.

The new law provides that funds may be distributed to the beneficiaries in the proportions specified in the written designation kept on file in the records of the financial institution. If no proportions are specified, the funds are evenly divided between the beneficiaries.

What if a beneficiary predeceases the account owner?

If there are two or more beneficiaries, and a beneficiary predeceases the account owner, the designation goes back to equal distribution unless the POD designation is changed by the account owner to state otherwise. As under prior law, if none of the designated beneficiaries survive the account owner, sums remaining on deposit belong to the estate of the last surviving account owner.

Some pros and cons

POD accounts can be a useful alternative used in estate planning since they generally permit bank account assets to avoid probate. After the account holder’s death, such funds can be distributed to the beneficiaries designated by the account owner outside probate. Beneficiaries have no rights to the money during the account owner’s lifetime. Beneficiary designations on POD financial accounts also take precedence over conflicting provisions of a will.

One possible disadvantage to allowing non-equal distributions POD account designations is that it could give rise to disputes among the beneficiaries. Litigation could result to resolve claims regarding the intent of the account owner or the validity or the correct interpretation of the account owner’s distribution instructions.

Effective date

The new law was signed and took effect on March 29, 2013, and affects all accounts containing the POD designation, created before, or on, or after March 29, 2013.

Estate planning can be a complex process and state and federal laws affecting estate planning are subject to frequent changes. Individuals desiring assistance in these matters should consult with an experienced estate planning attorney who stays current in this field in order to ensure that it is done correctly.

Contact Our Firm

Co-Counsel Services for
settling of Personal Injury and Divorce Cases

Read More

Important intake forms

Prepare for your Meeting

Our Elder Law & Estate Planning Blog

Read Weekly Updates

Join our mailing list

Sign up here

Recent Blog Posts

Is a deathbed will valid in Colorado?

Estate planning is one of those things that people tend to put off, even when they know they should do it and they honestly want to do it. It’s just easy to procrastinate and push it down the road as something you’ll do next month or next year or the year after that....

What does Medicare include?

Most people know that Medicare provides low-cost medical coverage for citizens that are over 65. However, what most people don’t know is precisely how Medicare coverage works. Medicare’s services are divided into four parts, each providing different benefits. They...

Be wary of trusts that are too specific and ironclad 

A trust, when drafted correctly, can be an incredibly effective way to leave assets to your heirs. Among other things, it provides you with an unprecedented level of control over the money you leave behind.  However, you have to be careful not to take this control too...

Turning 18? It’s time to set up a health care power of attorney

As soon as you turn 18, there is something that you have to consider. The fact is that your parents no longer have any control, legally, over your life. If you get hurt or end up in the hospital, they will have no access to your medical information. The same is true...

What fiduciary duties does an estate’s personal representative have?

As you've browsed our website, you've likely uncovered how personal representatives of estates have various responsibilities that they must fulfill in their role. These include inventorying and safeguarding testators' assets, paying off their creditors, filing their...