Avoiding probate can be challenging, but it isn’t impossible. Oklahoma residents can use simple tools like payable-on-death (POD) designations and beneficiary designations to transfer assets directly to loved ones—without going through probate court. These tools are easy to set up, legally recognized, and can be a powerful part of an overall estate plan.
What Is Probate?
Probate is the legal process through which a deceased person’s assets are collected, debts are paid, and remaining property is distributed to heirs. While probate provides a structured way to settle an estate, it can also take months or even years. It may also involve court fees, legal expenses, and public disclosure of financial matters.
Utilizing non-probate transfers, such as POD and beneficiary designations, can simplify the process and enable families to receive assets more quickly.
What Is a Payable-on-Death (POD) Designation?
A payable-on-death designation allows you to name a beneficiary who will receive the funds in a bank account, certificate of deposit, or other financial account upon your death. While you’re alive, you retain full control over the account. After your death, the bank releases the funds directly to your named beneficiary while avoiding probate.
To set up a POD designation in Oklahoma:
- Contact your bank or credit union.
- Complete the financial institution’s POD form.
- Provide the beneficiary’s full legal name and contact information.
POD designations are typically used for:
- Checking or savings accounts
- Money market accounts
- Certificates of deposit (CDs)
What Is a Beneficiary Designation?
Beneficiary designations work similarly but apply to assets such as life insurance policies, retirement accounts (e.g., IRAs and 401(k) plans), and annuities. When you name a beneficiary, the financial institution transfers ownership of the asset to that person upon your death, avoiding the need for probate.
You can typically name both primary and contingent (or backup) beneficiaries. It’s essential to review these designations periodically, particularly after significant life events such as marriage, divorce, or the birth of a child.
Legal Requirements in Oklahoma
Under Oklahoma law, both POD and beneficiary designations are legally enforceable, allowing for direct transfers of property outside of probate. Oklahoma courts recognize these designations as valid non-probate transfers under Title 58 of the Oklahoma Statutes, provided they meet basic formalities.
The named beneficiary must survive you and be identifiable. If no beneficiary is named or the beneficiary dies before you, the asset may revert to your estate and go through probate.
Common Mistakes to Avoid
To ensure your POD and beneficiary designations work as intended:
- Keep your designations up to date. Outdated or missing information can delay transfers.
- Avoid naming minors unless you’ve also created a trust or custodial account.
- Coordinate with your will or trust to prevent conflicts or unintended consequences.
- Notify your beneficiaries and keep documentation in a secure place.
Work with an Oklahoma City Estate Planning Attorney
Payable-on-death and beneficiary designations can help you simplify your estate, reduce stress on your family, and avoid unnecessary legal costs. But they must be part of a thoughtful, coordinated estate plan. Conflicting designations, missing forms, or unanticipated tax consequences can cause problems if you don’t plan ahead. Our team at Oklahoma City Probate Attorneys can help. Call us in Oklahoma City today at 405-367-8710 or ask a question online.
