PAYABLE ON DEATH DESIGNATIONS
Oklahoma permits the use of “Payable On Death” or “P.O.D.” designations for accounts and certificates
of deposit at banks, savings and loan associations and credit unions. Statutory authority is found at 6
OS§§901 and 2025 and 18 OS§381.39a. The proceeds of the account or certificate of deposit will be
paid by the financial institution to the designated beneficiary or beneficiaries upon proof of the account
owner’s death. This will avoid probate and is largely the appeal of its use. Oklahoma law considers the
P.O.D. designation to be based upon a contract matter between the account owner and the financial
institution. It is not a trust or a will, but a creation of the Oklahoma statute and the depositor contract with
the financial institution. It is similar to payments made following death from a life insurance policy (contract).
The P.O.D. beneficiary has no legal rights to the account during the account owner’s life. The account owner
retains the right to remove or change the P.O.D. beneficiary or beneficiaries.
In addition to naming a primary beneficiary or beneficiaries, the account owner may also name a contingent
beneficiary or beneficiaries. For example, “(Name of Account Owner), payable on death to (Name of Primary
Beneficiary). If the designated P.O.D. beneficiary is deceased, then payable on death of the account owner to
(Name of Contingent Beneficiary), (Name of Contingent Beneficiary), and (Name of Contingent Beneficiary),
as contingent beneficiaries, in equal shares.” Contingent beneficiaries must be labeled as such or they will be deemed to be a primary beneficiary.
Or, perhaps the account owner has more than one primary beneficiary he or she wishes to name. If so, the following language could be used, “(Name of Account Owner), payable on death to (Name of Beneficiary),(Name of Beneficiary) and (Name of Beneficiary), in equal shares.” If a primary beneficiary is deceased, and a contingent beneficiary was not named, the account proceeds will be paid to the estate of the deceased primary beneficiary. If the primary beneficiary is deceased the proceeds will be paid to the contingent beneficiary.
Oklahoma law does not permit the naming of contingent beneficiaries if more than one primary beneficiary is named. For example, if two or more primary P.O.D. beneficiaries are named, the account owner may not name a contingent beneficiary. Any deceased primary beneficiary’s share will be paid to his or her estate.
Oklahoma law permits P.O.D. designations for joint account owners with right of survivorship. The P.O.D. beneficiary has no rights until the death of the surviving joint owner. The surviving joint owner has the same rights over the account as a sole account owner.
When proceeds are paid to a contingent beneficiary or beneficiaries, any deceased contingent beneficiary’s estate shall receive the deceased contingent beneficiary’s share of the account proceeds.
Financial institutions have the right following 60 days from the account owner’s death to convert the deceased account owner’s money into a non-interest bearing account. Normally P.O.D. beneficiaries will become aware of the account and make demand for payment before this would occur.