Pay-on-Death Bank Accounts and Creditor Claims in Florida

A pay-on-death bank account in Florida allows the account owner to name a beneficiary who receives the funds automatically when the owner dies. The account is governed by Florida Statute 655.82, which provides that the beneficiary has no right to the funds during the owner’s lifetime and that ownership passes to the beneficiary at the owner’s death outside of probate.

POD accounts are among the most common non-probate transfer tools in Florida estate planning, but they provide no creditor protection to the account owner during their lifetime. Because the owner retains unrestricted access to the funds, a judgment creditor can garnish a POD account just as it would garnish any other bank account the owner controls. The creditor protection analysis changes after the owner’s death, when the funds transfer to the beneficiary and generally pass beyond the reach of the deceased owner’s creditors.

How POD Accounts Work Under Florida Statute 655.82

Florida Statute 655.82 establishes the legal framework for pay-on-death accounts at banks, credit unions, and other deposit institutions. The statute defines a POD designation as one in which the account is payable to one or more parties during their lifetimes and, on the death of the last surviving party, to one or more named beneficiaries.

Section 655.82(2) makes the beneficiary’s lack of lifetime rights explicit: a beneficiary in a POD account has no right to sums on deposit during the lifetime of any party. The beneficiary cannot withdraw funds, pledge the account, or interfere with the owner’s use of the money in any way. The owner retains complete control, including the right to change or remove the beneficiary at any time without the beneficiary’s knowledge or consent.

At the death of the sole party or the last surviving party, section 655.82(3)(b) provides that the sums on deposit belong to the surviving beneficiary or beneficiaries. If multiple beneficiaries survive, they take in equal and undivided shares unless the depository agreement specifies a different allocation. The statute also provides that if no beneficiary survives, the funds belong to the estate of the last surviving party.

The POD designation overrides any contrary provisions in a will. A testator cannot redirect POD funds through testamentary language because the transfer occurs by operation of the statute, not through the probate process. This means the account passes to the named beneficiary regardless of what the owner’s will states.

Creditor Rights During the Owner’s Lifetime

POD accounts offer no protection from the owner’s creditors while the owner is alive. The owner has unrestricted access to withdraw, spend, or close the account, and a creditor holding a judgment against the owner has the same rights to the funds that the owner does.

A judgment creditor can serve a writ of garnishment on the bank where the POD account is held. The bank must freeze the account and respond to the garnishment within the time frame specified by Florida law. The POD beneficiary designation does not create any defense to garnishment because the beneficiary has no present ownership interest. The funds belong entirely to the owner until death, and the creditor is entitled to whatever the owner could access.

This is the fundamental difference between a POD account and an ITF (in trust for) account, where the beneficiary holds equitable ownership from the date of funding. An ITF account structured as an irrevocable gift transfers beneficial ownership to the beneficiary immediately, placing the funds beyond the reach of the account holder’s creditors. A POD account does not transfer any ownership interest until death, leaving the funds fully exposed to the owner’s creditors throughout their lifetime.

Creditor Rights After the Owner’s Death

The creditor protection analysis shifts substantially when the POD account owner dies. Under Florida Statute 655.82, ownership passes to the designated beneficiary at the moment of death, and the funds are not part of the deceased owner’s probate estate.

Because the funds are not probate assets, the deceased owner’s personal representative generally has no authority over them. A creditor who files a claim in the probate proceeding cannot reach POD funds through the standard probate claims process, because those funds are no longer estate property. The beneficiary receives the money by presenting a death certificate to the bank, and the transfer occurs without court involvement.

Florida law does not currently have a comprehensive statute that allows creditors to recover from all non-probate transfers when the probate estate is insufficient to pay debts. Several other states have adopted provisions based on the Uniform Probate Code that permit creditors to pursue non-probate transfer recipients, including POD beneficiaries, when the probate estate cannot satisfy outstanding claims. Florida has not enacted such a provision, which means POD account funds generally remain with the beneficiary even if the deceased owner died with unpaid debts.

There are exceptions. If the probate estate is insufficient to pay creditors, certain non-probate assets may be reachable under specific Florida statutes. A revocable trust, for example, must satisfy creditor claims under Florida Statute 733.607(2) when the probate estate is inadequate. POD accounts do not fall under this specific provision, but Florida courts have considered whether other equitable principles might apply in extreme circumstances.

POD Accounts and Undue Influence Challenges

Florida courts have held that POD designations are subject to challenge on grounds of undue influence, fraud, duress, and overreaching. The First District Court of Appeal addressed this issue directly in Keul v. Hodges Blvd. Presbyterian Church, 180 So.3d 1074 (Fla. 1st DCA 2015), where the court invalidated a POD designation obtained through a confidential relationship.

The Keul decision relied on the policy articulated in Florida Statute 733.107 and In re Estate of Carpenter, 253 So.2d 697 (Fla. 1971), which established that a presumption of undue influence arises when a substantial beneficiary occupies a confidential relationship with the decedent and is active in procuring the contested disposition. The court held that although a POD designation is technically an inter vivos arrangement rather than a testamentary transfer, it functions as a will substitute and is subject to the same equitable considerations that apply to testamentary transfers.

This means that family members and other interested parties can challenge a POD designation in probate court if they believe it was procured through improper means. The existence of an undue influence challenge does not automatically freeze the POD funds, but a successful challenge can require the beneficiary to return the money to the estate for distribution according to the owner’s will or Florida’s intestacy statutes.

POD Accounts Compared to Other Account Types

The creditor protection profile of a POD account is weaker than several other account structures available under Florida law. Understanding these differences is important for anyone developing a bank account protection strategy.

Feature	POD Account	ITF Account	Joint TBE Account	UTMA Account
Owner’s creditor protection during lifetime	None	Yes (if irrevocable gift)	Yes (individual creditors only)	Yes
Probate avoidance	Yes	Yes	Yes	N/A
Beneficiary’s interest during owner’s lifetime	None	Equitable ownership	Co-ownership	Beneficial ownership
Revocable by owner	Yes	No (if true ITF)	Requires both spouses	No
Post-death creditor protection	Generally yes	Yes	Automatic to survivor	N/A

Married couples in Florida have access to tenancy by the entirety account titling, which protects the entire account balance from the individual creditors of either spouse. This protection applies during the owners’ lifetimes and is far more robust than the nonexistent lifetime protection of a POD account.

UTMA custodial accounts under Florida’s Uniform Transfers to Minors Act provide statutory creditor protection because the funds are considered property of the minor child from the date of the gift. Unlike a POD account, where the owner retains full control, a UTMA account transfers ownership to the child and removes the funds from the custodian’s creditor exposure.

Disadvantages of POD Accounts

POD accounts carry several limitations beyond the absence of lifetime creditor protection that account owners should weigh against the probate avoidance benefit.

The owner cannot control how the beneficiary uses the funds after receiving them. Unlike a trust, which can impose conditions on distributions, a POD account transfers the full balance outright to the beneficiary with no restrictions. If the beneficiary is a minor, the bank will not release the funds without a court-appointed guardian, which can create delays and expense that a UTMA account or trust would avoid.

POD designations override wills, which can create unintended consequences when an owner updates their estate plan but forgets to change the POD beneficiary. A common scenario involves an owner who executes a new will leaving everything to a second spouse but neglects to remove a former spouse as the POD beneficiary on a bank account. The former spouse receives the POD funds regardless of the will’s terms.

Multiple POD beneficiaries take in equal shares unless the depository agreement provides otherwise, and most banks do not permit percentage-based allocations. If the owner wants an unequal distribution, a trust or other vehicle is necessary.

POD accounts are also vulnerable to depletion during the owner’s final illness or incapacity. If the owner grants a power of attorney, the agent can withdraw POD funds, potentially leaving nothing for the named beneficiary. Florida courts addressed this issue in Wilde v. SunTrust Bank, where the Fourth District Court of Appeal held that an attorney-in-fact’s withdrawal from a Totten trust account did not constitute an impermissible change to a disposition effective at death.

When POD Accounts Serve a Legitimate Purpose

POD accounts are most useful as a probate avoidance tool for account owners whose primary concern is ensuring a specific person receives the funds quickly after death. The account is simple to establish, costs nothing beyond the standard bank account fees, and requires no legal documentation beyond the bank’s POD designation form.

The account becomes problematic when the owner needs lifetime creditor protection, wants to impose conditions on the beneficiary’s use of funds, or has a complex estate plan that requires coordination among multiple beneficiary designations. In those situations, the absence of any ownership transfer during the owner’s lifetime leaves the funds fully exposed to garnishment and other collection remedies that a properly structured bank account protection plan would address.