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Q: Is there a difference between a payable on death designation and a transfer on death designation?

A: The only difference that I have found relates to the type of account each designation applies to. When naming a beneficiary on a bank account, the term that is generally used is payable on death or POD. When naming a beneficiary of a brokerage or investment account, the designation is usually transfer on death or TOD.

If you have a really old bank account you might have a totten trust designation using language similar to "John Doe, in trust for Jane Doe" or perhaps "John Doe as trustee for Jane Doe". Totten trusts, sometimes referred to as a poor man's will, allowed for the transfer of ownership of a bank account to a beneficiary after the owner's death. Totten trusts were the predecessor to POD designations, but a few states still recognize them.

Finally, on your life insurance policies, annuities, IRAs and other types of retirement account you may name a beneficiary rather than execute a POD or TOD form.

I'm not sure why each industry has a different name for beneficiary designations, but I'm sure a lawyer was involved.

Q: If I grant a general power of attorney to my daughter, will she be able to use it to change my estate plan?

A: Possibly. Although the Indiana Code specifically prohibits an attorney-in-fact from making or changing a principal's will, it specifically grants her authority to create trusts. Also, the code sets limits on the attorney-in-fact's ability to amend and change beneficiary and trust designations.

The main restriction that the Code sets is that she "take the principal's estate plan into account." I haven't researched the issue, but it sure sounds to me like she could make changes to your estate plan if she thought it appropriate to do so.

The best way to restrict your daughter's ability is to specifically deny her the authority to make changes to your estate plan including, but not limited to, beneficiary designations on accounts and trusts. Also, some trusts include language that states the ability to amend or revoke is personal and can't be exercised by any one other than the settlor, which would certainly limit her ability to change your mind for you.

Thanks for the questions.

Opinions expressed solely are those of the writer. Christopher W. Yugo is a member of the Indiana Bar and a vice president and senior trust Officer for First National Bank's Trust Department. Address questions to Yugo in care of The Times, 601 W. 45th Ave., Munster, IN, 46321. Yugo's information is meant to be general in nature. Specific legal, tax, or insurance questions should be referred to your attorney, accountant or estate-planning specialist.

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