Detailed answer

Short answer: In Massachusetts, funds in payable‑on‑death (POD) accounts usually pass outside probate to the named beneficiary and are not treated as estate assets available to pay the decedent’s creditors. However, there are important exceptions and practical steps a personal representative or creditor must consider. If the POD designation names the decedent’s estate as beneficiary, or the transfer was done to defeat creditors (a fraudulent transfer), the money can become available to pay debts. Because outcomes turn on facts and timing, you should consult a probate attorney about specific accounts and claims.

How POD accounts normally work in Massachusetts

POD accounts (also called “payable on death,” “in trust for (ITF),” or direct beneficiary accounts) let an account owner name a beneficiary who receives the money when the owner dies. Because the money flows directly to that beneficiary, courts typically do not include POD funds as probate estate assets. The governing law for probate and many nonprobate transfers in Massachusetts is in the Massachusetts Uniform Probate Code (Chapter 190B of the Massachusetts General Laws). See: M.G.L. c. 190B.

When POD funds are available to pay estate creditors

• The beneficiary is the estate: If the account is payable to the decedent’s estate (for example, the owner designated “Estate of John Doe” as the beneficiary), then the funds become estate property and are subject to creditor claims in the normal probate process.
• Fraudulent transfers or intent to defeat creditors: If the decedent changed the account specifically to hide assets from known creditors or to hinder creditors, a creditor or court may challenge the transfer as a fraudulent conveyance and seek to reach the funds. Courts look at timing, motive, and whether the decedent was insolvent when the transfer occurred.
• Commingled funds or control issues: If the decedent gave another person power of attorney or co‑owner access and the funds were used or treated as the decedent’s, a court may find that the transfer was not effective to defeat creditor claims.
• Statutory or procedural exceptions: Certain Massachusetts statutes and probate procedures affect how claims are presented and paid during estate administration. For general guidance on how the Probate Court handles a deceased person’s debts, see the Massachusetts Probate & Family Court resources: Mass.gov — Probate court and debts.

Practical consequences for creditors and personal representatives

If estate assets (probate assets) are insufficient to pay valid creditor claims, creditors will typically look first to probate estate assets. Creditors cannot automatically reach money that passed outside probate to a named individual beneficiary. But they can:

• Challenge transfers as fraudulent under applicable law;
• Pursue a claim against the estate if the beneficiary is the estate or if state law treats the transfer as part of the estate;
• Seek turnover if the beneficiary received funds in violation of a court order or other legal obligation.

Typical steps to take now

1. Locate account records and beneficiary designations. Confirm whether the account is POD, joint, or payable to the estate.
2. If you are a personal representative, open a probate estate if required to administer debts and determine whether the POD beneficiary is the estate.
3. If you are a creditor, file an appropriate claim in Probate Court if the estate is opened and review whether facts support a challenge to the POD transfer (for instance, fraud or sham transfers).
4. Talk with a Massachusetts probate attorney promptly. Timing matters: statutes of limitation and probate claim deadlines may limit remedies.

Where Massachusetts law is relevant

The rules on probate, nonprobate transfers, and claims are governed by Massachusetts law, in particular the Massachusetts Uniform Probate Code (M.G.L. c. 190B) and related Probate Court procedures. For the statutory text and to research specific provisions, see the general chapter: M.G.L. c. 190B. For procedural guidance about creditor claims in the Probate Court, see the Massachusetts Probate & Family Court pages: Probate & Family Court (Mass.gov) and how the Probate Court handles debts.

Disclaimer

This article explains general principles of Massachusetts law and common practical issues involving payable‑on‑death accounts. It is educational only and is not legal advice. You should not rely on this article to make legal decisions. For advice about a specific account, estate, or creditor claim, consult a Massachusetts probate attorney.

Helpful Hints

• Check the exact beneficiary language on bank paperwork—”estate” vs. a named person makes a major difference.
• If you suspect a transfer occurred to avoid creditors, preserve records of the timing and communications around the change.
• Do not withdraw or disburse POD funds until you know whether the account is truly nonprobate and free of competing claims.
• If you are a creditor, explore whether an estate administration has opened; filing a claim in probate may be required to preserve rights.
• Ask the bank for its procedures after death (they usually require a death certificate and beneficiary ID) and for any internal forms used to establish POD status.
• Get counsel early—fraudulent transfer claims and probate creditor procedures are fact‑sensitive and time‑limited.