Any problems using a charity on a POD account instead of a live person?

[badatmath]

I am meeting a lawyer later this month to make a will so I will ask him but my intention it that when my (living) POD passes away (likely before me) to name a charity instead.

Any issues with the banks, etc not doing this correctly or things I should think of?

Or should I just drop the POD when the person passes and let the total estate be divided up to charities?

 

[pb4uski]

No, it would still be the executor who manages the process but when it comes time to either transfer assets or cut checks, the assets would be transferred to a designated charity rather than a person and same for a check.

My uncle's will, which I would be the executor of, includes both individuals and charities as beneficiaries.

 

[donheff]

I would also check with the charity to get the best POD title and address.

 

[SecondCor521]

There are often very similarly named charities, so you would want to do some combination of (a) get the name of the charity exactly correct, (b) list the address, and/or (c) list the EIN of the charity in your will or POD.

If you're splitting assets between people and charity, there are estate and income tax implications around inherited assets which means it may be better to leave certain assets to the people and other assets to charity. Your estate planning attorney or a good CPA can advise on these issues.

 

[omni550]

My 94-year old bachelor uncle who lived in Canada left his entire estate to a large, well-known Canadian charity. His attorney (who drafted the Will for my uncle) was his executor.

My sister and I (both U.S.-based) were his Powers of Attorney the last ~8 years of his life. Among other things, we arranged for him to move into assisted living, sold his house, and invested his assets as best we could to cover his expenses in assisted living, etc. Our POA ceased upon his death.

After our uncle died, it took me more than 10 years of [politely] haranguing the executor-attorney to try and get him to deliver the estate (100% liquid at that point) to the charity. I had no personal interest nor 'power' in this, other than trying to make sure my uncle's final wishes were fulfilled.

It was only after I finally reached out to the charity (11 years after my uncle had died!) to let them know that our uncle had left his entire estate to them, that "somehow" the executor-attorney finally relinquished the funds to the charity.

I'm guessing the executor-attorney was milking the estate for a monthly fee (from my limited research this could be ~$1000/mo.) which is possibly why he didn't send the funds over to the charity sooner.

omni

 

[Sunset]

^^^^^^^^

When I was in a Canadian Bank arranging an estate account, I saw on the bank computer MANY estate accounts.
The bank teller told me they have many estate accounts that just sit around for many years.
I found some banks I dealt with in Canada to be slow to let go of the money.

 

[pb4uski]

^^^^. But they seem so nice. [emoji848]

 

[CRLLS]

No, it would still be the executor who manages the process but when it comes time to either transfer assets or cut checks, the assets would be transferred to a designated charity rather than a person and same for a check.

My uncle's will, which I would be the executor of, includes both individuals and charities as beneficiaries.

I am no expert but am curious about this. Wouldn't a POD account automatically change ownership to the Charity bypassing any action of the executor? I would expect that, being a POD, an executor would have no authority over the account, similar to a JOWROS account does? It seems like it should. It would, of course require the charity to know of the deceased's intentions, their demise and to obtain a death certificate.

If it doesn't work this way, how would it be different from just leaving the bequest in the will?

 

[badatmath]

I thought the lawyer notified the beneficiaries. Is that not true? I know in the estate I was written out of that I got notified me and other kid got a minimal amount and preferred kid and charity got the rest. So charity would know from that. It was a trust though.

Basically I want the executor to not have to work very hard because there is no doubt it my mind it is not very fun to do it.

But I guess if POD lawyer would not know? So maybe a non person is not a good idea.

 

[badatmath]

Update: lawyer advised against a non person on a TOD/POD. Didn't really explain it.

(I have a person now, I was just thinking for a backup entity but I can mess with that later). I expect the person to predecease me.

I rather think the lawyers I have met say no to anything that does not earn them money. . .

 

[braumeister]

Update: lawyer advised against a non person on a TOD/POD. Didn't really explain it.

FWIW, when I asked one of my favorite charities about naming them as TOD on an an IRA, they said that would be fine. But they also included this tip:

It’s critical to let us know of your gift because many popular retirement plan administrators assume no obligation to notify a charity of your designation. The administrator also will not monitor whether your gift designations are followed.

 

[badatmath]

Hmm. Wouldn't the executor of the estate take care of that too?

 

[Sunset]

Hmm. Wouldn't the executor of the estate take care of that too?

If they are nice and know about it, But really under no obligation to actually do anything as it is not part of their job to take care of or distribute.

 

[badatmath]

That makes sense I guess.