Yes, you can name a beneficiary on most bank accounts, and it bypasses probate when you die
Most banks let you name a payable-on-death (POD) beneficiary or transfer-on-death (TOD) beneficiary on checking and savings accounts. When you die, the money in that account goes directly to the person you named, without going through your will or probate court. The beneficiary has no access to the account while you are alive—you keep full control and can spend, withdraw, or change the beneficiary at any time.
Not all banks call this the same thing. Some use "POD," others say "in trust for" or "ITF," and a few offer "TOD" designations. The mechanics are the same: you fill out a form, name your beneficiary, and the bank records it. When you die, you present the death certificate and the account transfers to them.
This is different from making someone a joint owner. A joint account holder can withdraw money right now. A beneficiary cannot touch the account until you die and they provide proof of death to the bank.
Key Takeaways
- You can name a payable-on-death beneficiary on most checking and savings accounts, and that person receives the money directly when you die without probate.
- The beneficiary has no access to your account while you are alive, and you can change or remove them at any time.
- Different banks use different names for this feature—POD, TOD, or "in trust for"—but the result is the same.
- You will need to fill out a beneficiary form at your bank, and the beneficiary will need to show a death certificate to claim the money after you die.
- If you name multiple beneficiaries, most banks split the account equally among them unless you specify otherwise.
How to add a beneficiary at your bank
Contact your bank directly—by phone, in person, or through their website—and ask to add a payable-on-death beneficiary. Most banks have a form you fill out that asks for the beneficiary's full name, date of birth, and relationship to you. Some banks also ask for their Social Security number or address, though this varies.
You do not need the beneficiary's permission to name them. You do not need to tell them you did it. The bank records the designation, and that is all that happens until you die.
If you want to name more than one beneficiary, tell the bank how you want the money split. If you do not specify, most banks divide the account equally. For example, if you name two beneficiaries and have $10,000 in the account, each gets $5,000 when you die.
Keep a copy of the beneficiary form for your records. If the bank later claims they have no record of your designation, you will have proof.
What happens when you die
When you die, your beneficiary contacts the bank with a death certificate. The bank verifies the certificate, confirms the beneficiary's identity, and transfers the money. This usually takes one to three weeks, though some banks move faster.
The beneficiary does not need a lawyer or a court order. They do not need to go through probate. The bank handles it directly. This is one of the main reasons people use POD designations—it is faster and cheaper than probate, and it keeps the account out of your will.
The money the beneficiary receives is not subject to federal income tax. However, if the account earned interest before you died, that interest may be taxable to your estate. State inheritance taxes vary; some states tax POD transfers and some do not.
Differences between a beneficiary and a joint owner
A joint account owner can withdraw money, make deposits, and close the account right now, while you are alive. They have equal legal rights to the account. A POD beneficiary has no rights to the account until you die. They cannot see the balance, cannot withdraw money, and cannot make changes.
If you want someone to help you manage money while you are alive—to pay bills or make deposits on your behalf—a joint account or a power of attorney is the right tool. If you only want them to receive the money after you die, a beneficiary designation is simpler and safer because they cannot spend it before then.
Joint accounts also have a tax consequence: if the other owner dies first, their half of the account may be subject to estate tax in some states. A POD beneficiary avoids this complication.
Changing or removing a beneficiary
You can change your beneficiary at any time by contacting the bank and filling out a new form. You do not need the old beneficiary's permission. The bank will update their records, and the new designation takes effect immediately.
If you want to remove a beneficiary without naming a new one, you can do that too. The account will then pass through your will or to your heirs under your state's intestacy laws if you have no will.
Keep the bank's confirmation of any change. If you change your beneficiary and then die, the bank should honor the most recent designation on file. But if there is confusion, a written record protects your estate and your intended beneficiary.
What happens if your beneficiary dies before you
If the person you named as beneficiary dies before you do, the designation becomes void. The money does not automatically go to their heirs. Instead, the account will pass through your will or to your heirs under state law.
For this reason, some people name a backup or contingent beneficiary. Ask your bank if they allow this. If they do, you can name a second person to receive the money if the first beneficiary dies before you.
If you do not name a contingent beneficiary and your primary beneficiary dies, you should update your designation as soon as possible. Otherwise, the account may end up in probate or go to people you did not intend.
POD accounts and creditors
In most states, money in a POD account is protected from your creditors after you die. The creditor cannot claim the money that goes to your beneficiary. However, creditors can claim money from your other assets, including your will and your non-POD bank accounts.
The rules vary by state. Some states offer stronger protection than others. If you have significant debt and are worried about creditors, speak with an attorney in your state about how POD accounts are treated.
While you are alive, creditors can still reach a POD account. The POD designation only protects the money after you die and it transfers to the beneficiary.
Frequently Asked Questions
Can I name my minor child as a beneficiary?
Yes, but the money cannot go directly to the child. When you die, the bank will hold the money until the child reaches the age of majority (usually 18), or you can name a custodian or guardian to manage it for them. Ask your bank what options they offer for minor beneficiaries.
What if I want different people to get different amounts?
Most banks let you specify unequal splits. For example, you can name two beneficiaries and say one gets 60 percent and the other gets 40 percent. Fill this out on the beneficiary form when you set it up, or call the bank to update it.
Does naming a beneficiary affect my will?
No. A POD designation overrides your will for that specific account. If your will says the money should go to someone else, the beneficiary you named on the account form wins. The rest of your estate still passes according to your will.
Can a bank refuse to honor a beneficiary designation?
Banks rarely refuse, but they can if the designation is unclear, forged, or if there is a court order against it. This is why keeping a copy of the form you signed is important—it proves you made the designation and when.
Is there a fee to add a beneficiary?
Most banks do not charge a fee to add or change a beneficiary. Some may charge a small fee if you request a certified copy of the designation, but the designation itself is free.