Can a Sole Proprietorship Account Designate a POD?

Question:

We recently purchased matrices that stated a sole proprietorship could have a POD assignment. In the most recent New Accounts Seminar I attended, the instructor stated specifically that they can not have a POD. It has caused a bit of confusion with our other branches. Can you clarify or refer me to sites that I might get this clarified?

Answer:

A sole proprietorship is legally synonymous with the individual who is the owner of the business. It is an informal business arrangement that has not gone through the steps necessary to make it a separate legal entity. As a result, if you receive a levy on the sole proprietorship, for example, it will also affect the individual accounts of the owner and vice versa.

Because the sole proprietorship is legally synonymous with the individual who owns it, the individual should have the same legalprivileges he would have with an individual account, including the right to designate a POD beneficiary. Please note, however, that you should check your state statutes and caselaw to see if there is something to the contrary that would restrict this right in your state.

First published on BankersOnline.com 1/7/02