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Ely, Counselor at Law
Category: Estate Law
Satisfied Customers: 102143
Experience:  Fully licensed attorney in Texas in private practice.
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I live in Utah and have few assets to my name. I recently

Customer Question

I live in Utah and have few assets to my name. I recently named a payable on death beneficiary to my checking & savings accounts. Total assets in those accounts usually average about $30,000. Will the beneficiary be responsible for paying estate taxes on those funds upon my death? If so, how would this work? Making someone a POD beneficiary avoids probate, does it not?
Submitted: 11 months ago.
Category: Estate Law
Expert:  Ely replied 11 months ago.

Hello and welcome to JustAnswer. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.

The answer is no. A POD clause does not go through probate. It is not a probate matter. At one's passing, the bank would simply turn the account over to the beneficiary on the POD. The beneficiary would not pay any type of estate or gift taxes, because this would not be a probate matter. The whole point of the POD is to avoid probate.

This would be seen as income tax, however. They would have to report it as such.

Otherwise, this is not taxable as it is not probate, and it falls well below the threshold of millions of dollars when the federal tax applies in such a situation (that the estate would have to pay anyhow, not the beneficiary).

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