What is the purpose of POD accounts and revocable living trusts?

The primary purpose of Payable on Death (POD) accounts and revocable living trusts is to avoid the probate process. When an asset is designated as a POD account, it allows the account's balance to pass directly to the named beneficiary upon the account holder's death, bypassing the probate process. This means that the beneficiary can access the funds without waiting for court approval, which can be time-consuming and costly.

Similarly, revocable living trusts are designed to hold and manage assets during a person's lifetime, and upon their death, the assets within the trust can be distributed to beneficiaries without going through probate. This achieves a smoother, often faster transfer of assets and can also help maintain privacy since probate proceedings are public records.

Both of these estate planning tools serve to simplify the transfer of assets upon death, thereby making it easier and quicker for beneficiaries to receive what they’re entitled to without the legal complexities associated with probate.