If other attorneys call me with questions I conclude that many laymen have the same question. A California attorney called today to inquire about his mother’s situation in Florida.
His mother owns an upside down condo in Florida. She is elderly and ill. The mother’s biggest asset is a bank account which she titled in her name with a pay-on-death designation naming the attorney-son as death beneficiary. The son asked me if in the event the mother’s children do not continue paying the condo mortgage after her death could the mortgage lender take the money currently held in the mother’s bank account.
A pay-on-death bank account (or ” ITF account) transfers automatically upon your death just as a jointly owned asset. The titling of the account with a pay-on-death designation ensures that the death beneficiary immediately gains title upon the owner’s death. Your estate and personal representative have no ownership interest in the account because your rights expire upon your death. Therefore, to answer the attorney’s question, neither the mortgage company nor any other creditor could take money the son acquires in the mother’s account to pay the mother’s debts after her death.
Last updated on May 22, 2020