As a general rule, you should contest a POD bank account as soon as you discover the beneficiary designation on the account may be invalid.
That said, because the wrongful act is the improper change of the POD beneficiary, the statute of limitations for contesting a POD bank account would take effect on the date of the improper change or the date by which you reasonably could have discovered the improper change.
As for when the statute of limitations would elapse for contesting a POD bank account, it would depend on the cause of action used to challenge the improper change to the POD beneficiary. For example, if the cause of action was elder financial abuse, you would have four years to bring a contest, according to California Welfare and Institutions Code section 15657.7. If the cause was conversion (e.g., someone taking, withholding or blocking access to the bank account), you would have three years to bring a contest, according to California Code of Civil Procedure section 338 (c)(1).
Although there are many more causes of action that could be brought to rectify an improper change of a POD beneficiary, what’s important to remember is that the longer you wait to contest a POD bank account, the more difficult it will be to recover the contents of the account from the designated beneficiary. As soon as the designated beneficiary claims the account, they can start spending its contents. If they’ve spent all its contents, seeking recovery could prove futile.
If you are unsure whether or not a particular POD bank account can be contested and whether doing so would be worth it, you should at the very least discuss the matter with a probate attorney, who can help you decide the best course of action based on your circumstances.
