Yes, you can name a beneficiary on most bank accounts, and it bypasses probate
Most banks let you name a beneficiary on checking and savings accounts. When you die, the money in that account goes directly to the person you named—it does not go through your will or probate court. The bank handles the transfer once they see a death certificate.
Not all account types allow this. Money market accounts and certificates of deposit (CDs) usually do. Some banks call this feature "payable on death" (POD) or "transfer on death" (TOD). A few banks do not offer it at all, so you need to ask yours directly.
Naming a beneficiary is free and takes minutes. You fill out a form at your bank, name one or more people, and decide how the money splits if you name more than one. The beneficiary has no access to the account while you are alive—you keep full control.
Key Takeaways
- Most banks offer payable-on-death (POD) beneficiaries on checking and savings accounts at no cost.
- Money goes directly to the beneficiary after you die and does not pass through probate or your will.
- You keep full control of the account and can change or remove the beneficiary at any time while alive.
- The beneficiary needs only a death certificate and ID to claim the money; the process usually takes one to four weeks.
- If you name multiple beneficiaries, specify whether they split equally or in different percentages.
How to set up a beneficiary at your bank
Contact your bank directly—by phone, in person, or online through your account dashboard. Ask for the beneficiary form or POD form. Some banks call it a "death beneficiary designation" or "transfer on death" form.
You will need to provide the beneficiary's full legal name, date of birth, and Social Security number or tax ID. If you name more than one beneficiary, specify the percentage each one receives. For example, 50% to your spouse and 25% each to two children. If you do not specify percentages, most banks split the money equally.
Sign the form in front of a bank employee if required—some banks allow you to sign electronically. Keep a copy for your records. The bank updates their system immediately, though the change may not show on your statement for a billing cycle or two.
What happens when the beneficiary claims the money
After you die, the person you named contacts the bank with a death certificate and a government-issued ID. The bank verifies the information and transfers the funds. This usually takes one to four weeks, depending on how quickly the bank processes the request and whether the death certificate is an official certified copy.
The beneficiary does not need a lawyer or court order. The bank handles everything. If you named multiple beneficiaries, each one receives their share based on the percentages you set.
The money is not subject to probate, which means it does not go through the court system and does not have to wait for your will to be read. This is one of the main reasons people use beneficiary designations—speed and simplicity.
The difference between a beneficiary and a joint account holder
A beneficiary has no access to the account while you are alive. They cannot withdraw money, see the balance, or make deposits. Only after you die does the money go to them.
A joint account holder can access the account right now. They can withdraw, deposit, and spend the money immediately. If you add someone as a joint owner to avoid probate, they have full control during your lifetime—which can be risky if you do not fully trust them or if they face creditor claims.
If you want someone to help manage your money while you are alive, a joint account or power of attorney is the right tool. If you want the money to go to them only after you die, a beneficiary designation is safer and simpler.
Changing or removing a beneficiary
You can change your beneficiary at any time while you are alive. Contact your bank, fill out a new beneficiary form, and sign it. The new designation replaces the old one. Keep the old form for your records in case there is ever a question about what you intended.
If you get divorced, check your beneficiary designation. Some states automatically remove an ex-spouse from certain accounts after divorce, but not all do. Many people forget to update beneficiaries after major life changes, so the money ends up going to someone they no longer want it to go to.
If you want to remove a beneficiary without naming a new one, ask your bank whether that is possible. Some banks require you to name at least one beneficiary; others let you leave the field blank, in which case the money becomes part of your estate and goes through probate.
What happens if your beneficiary dies before you do
If the person you named dies first, the money does not automatically go to their heirs. It stays in your account. You need to update your beneficiary designation with the bank to name someone else.
If you die without updating it, the money goes to your estate and is distributed according to your will or your state's intestacy laws—which may not be what you wanted. To avoid this, name a backup or "contingent" beneficiary when you set up the account. If your first choice dies, the money goes to the backup automatically.
Taxes and the beneficiary
The beneficiary does not pay income tax on the money they receive from a POD account. It is not considered income—it is a transfer of your assets.
However, if the account earned interest before you died, that interest is part of your taxable estate. Your estate may owe tax on it, depending on the size of your total assets. This is a matter for your executor or tax preparer, not the beneficiary.
If the account is very large, your estate may owe federal estate tax. This depends on your total assets and the year you die, as the threshold changes. A lawyer or tax professional can tell you whether this applies to you.
Frequently Asked Questions
Can I name a minor as a beneficiary?
Yes, but the money cannot go directly to them. A minor cannot legally control a bank account. The bank will hold the funds until the minor reaches the age of majority (usually 18 or 21, depending on your state), or you can name a custodian or guardian to manage the money on their behalf. Ask your bank how they handle this.
What if I name a beneficiary but also leave the account to someone else in my will?
The beneficiary designation overrides the will. The money goes to the person you named on the bank form, not to whoever the will says should get it. This is why it is important to keep your beneficiary designations up to date and aligned with your wishes.
Can a creditor or debt collector take money from a POD account?
Once you die, the money belongs to the beneficiary, and creditors generally cannot touch it. However, if you die with unpaid debts, your estate may have to pay them before the beneficiary receives anything. The rules vary by state and by the type of debt.
Do I need a lawyer to set up a beneficiary?
No. It is a simple form you fill out at your bank. You do not need a lawyer, notary, or witness in most cases. If your situation is complex—for example, you have a large estate, multiple marriages, or minor children—talking to a lawyer about your overall plan is wise, but the beneficiary form itself is straightforward.
Can I name my estate as a beneficiary?
Technically yes, but it defeats the purpose. If you name your estate, the money goes through probate just like everything else. You would be better off leaving the account as is and letting your will handle it, or naming an actual person as beneficiary to skip probate.