POD account and the Feds

[Gianni123]

What is the name of your state?NY
I have read that when a beneficiary of a deceased wants to withdraw money from a POD account the government can freeze the account until it is satisfied that there will be enough money in the estate to pay taxes. Can anyone expand on that?

 

[Snipes5]

What's a POD account?

Snipes

 

[BlondiePB]

What's a POD account?

Snipes

Payable on Death.

 

[BlondiePB]

What is the name of your state?NY
I have read that when a beneficiary of a deceased wants to withdraw money from a POD account the government can freeze the account until it is satisfied that there will be enough money in the estate to pay taxes. Can anyone expand on that?

POD accounts go directly to the beneficiary, like an insurance policy. POD accounts are not part of the estate of a deceased. Taxes are to be paid by the estate. POD accounts are NOT part of the decendent's estate. Just why are you trying to take the funds from the beneficiary of this account?

(Note to Snipes - The OP has a thread in Probate/Wills Section.)

 

[anteater]

POD accounts go directly to the beneficiary, like an insurance policy. POD accounts are not part of the estate of a deceased. Taxes are to be paid by the estate. POD accounts are NOT part of the decendent's estate. Just why are you trying to take the funds from the beneficiary of this account?

(Note to Snipes - The OP has a thread in Probate/Wills Section.)

But they could be part of the taxable estate. If the deceased arranged for the large majority of his/her assets to pass by benficiary designation, leaving little in the probate estate, and the taxable estate is big enough to be subject to estate tax, the executor/PR is in for a lot tougher job than he/she bargained for.

I don't know the definitive answer.

 

[BlondiePB]

But they could be part of the taxable estate. If the deceased arranged for the large majority of his/her assets to pass by benficiary designation, leaving little in the probate estate, and the taxable estate is big enough to be subject to estate tax, the executor/PR is in for a lot tougher job than he/she bargained for.

I don't know the definitive answer.

Read the OP's other thread in Probate. The OP is not even the personal representative/executor of this estate.

 

[anteater]

Read the OP's other thread in Probate. The OP is not even the personal representative/executor of this estate.

I took a glance and they seemed "cryptic." Irregardless, I thought that this was an interesting standalone question.

I've asked this question of several attorneys and CPA's that I deal with. Usually, the response is a long pause and then something like "Never had to deal with something like that. I think............."

The guesses seem to fall along 3 lines:
1) The executor/PR races the designated beneficiaries to the banks, brokers, custodians, etc, flashes the letters testamentary around and bluffs them into freezing any distributions. Or the executor/PR gets an order from the probate court and does the same "race."
2) The executor/PR figures out all the beneficiaries' shares of the tax and demands/begs that the beneficiaries fork over the money.
3) The executor/PR figures out all the beneficiaries' shares of the tax, hands the info to the IRS and says "Go git 'em, you mangy revenooers."

 

[BlondiePB]

I took a glance and they seemed "cryptic." Irregardless, I thought that this was an interesting standalone question.

I've asked this question of several attorneys and CPA's that I deal with. Usually, the response is a long pause and then something like "Never had to deal with something like that. I think............."

The guesses seem to fall along 3 lines:
1) The executor/PR races the designated beneficiaries to the banks, brokers, custodians, etc, flashes the letters testamentary around and bluffs them into freezing any distributions. Or the executor/PR gets an order from the probate court and does the same "race."
2) The executor/PR figures out all the beneficiaries' shares of the tax and demands/begs that the beneficiaries fork over the money.
3) The executor/PR figures out all the beneficiaries' shares of the tax, hands the info to the IRS and says "Go git 'em, you mangy revenooers."

There's something else that is not clear. The other thread has wording that this is a joint/co-owned account. If so, then this account now belongs to the other owner, like perhaps the surviving spouse, and is not POD until the other owner dies. Should this be so and anything happens to that money, someone could be in a lot of trouble.