Beneficiaries Have No Claim on P.O.D. Accounts Liquidated by Guardian

Beneficiaries of P.O.D. certificates have no claim on them after a guardian for the depositor liquidated them before the depositor's death. Ferguson v. Walsh (Ohio Ct. App., 10th, No. 02AP-1231, Aug. 26, 2003) (unpublished).

In 1997, Vera B. Peebles deposited two payable-on-death (P.O.D.) certificates at Huntington Bank. The P.O.D. deposits were initially valued at $20,000 each and Ms. Peebles designated Pamela Ferguson's minor children as beneficiaries. The following year, Eva Walsh was appointed guardian of Ms. Peebles' person and estate. In 1999, Ms. Walsh liquidated the two P.O.D. accounts upon their maturation and used the funds for Ms. Peebles' care.

Following Ms. Peebles''s death in 2000, Mrs. Ferguson made two claims on behalf of her children against the Peebles estate. When the executor of the estate rejected the claims, Mrs. Ferguson filed a complaint, alleging that Ms. Walsh wrongfully liquidated the P.O.D. certificates and that Huntington Bank negligently failed to ascertain and inform Ms. Walsh of the certificates' status. The trial court concluded that Mrs. Ferguson did not have standing to challenge the liquidation of the P.O.D. accounts by Ms. Walsh, a duly appointed guardian.

In an unpublished opinion, the Court of Appeals of Ohio, Tenth District, affirms. The court rules that the depositor-owner of funds in a P.O.D. account exercises full ownership over the funds during his or her lifetime and the interest of the beneficiary does not vest until the depositor-owner's death. The court further finds that a court-appointed guardian acting as a fiduciary has the right to withdraw funds from a P.O.D. account and thereby delete the beneficiary if it is in the best interest of the ward. The court rejects Mrs. Ferguson's argument that the liquidation of the accounts was wrongful because it contravened Ms. Peebles' intention to provide for Mrs. Ferguson's children.

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