Yes, you can name a beneficiary on most bank accounts, and it bypasses probate
Most banks let you name a payable-on-death (POD) 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 and proof of the beneficiary's identity.
Not every account type supports this. Money market accounts and regular savings accounts almost always do. Some banks also allow it on CDs (certificates of deposit). Joint accounts work differently—the surviving owner usually gets the money automatically, regardless of what your will says. Retirement accounts like IRAs and 401(k)s have their own beneficiary rules and do not use the POD system.
The process is simple: you fill out a form at your bank, name one or more beneficiaries, and update it whenever your situation changes. There is no cost, and the beneficiary does not need to know they are named until after you die.
Key Takeaways
- POD beneficiaries receive the account balance directly after your death without going through probate or your will.
- You can name one person, multiple people, or a backup beneficiary if your first choice dies before you do.
- The bank requires a death certificate and the beneficiary's ID to release the funds, which usually takes a few weeks.
- Naming a beneficiary does not affect your account during your lifetime—you keep full control and can change or remove the designation anytime.
- Retirement accounts, joint accounts, and trust accounts have different rules and may not use the POD system.
How to set up a POD beneficiary at your bank
Contact your bank directly—by phone, in person, or through their website—and ask for the POD beneficiary form. Some banks call it "transfer on death" (TOD) or "in trust for" (ITF), but the function is the same. You will need the full legal name, date of birth, and Social Security number of the person you want to name.
Fill out the form and return it to the bank. Keep a copy for your records. The bank updates their system, and the designation takes effect immediately. You do not need the beneficiary's permission, and they do not need to sign anything. During your lifetime, the account works exactly as it always has—the beneficiary has no access and no claim to the money.
If you want to name more than one beneficiary, you can usually split the account balance between them. Some banks let you specify percentages (for example, 60% to one person and 40% to another). Others divide equally by default. Ask your bank how they handle multiple beneficiaries before you submit the form.
What happens when you name a backup beneficiary
You can name a contingent beneficiary—a second person who receives the money if your first choice dies before you do. This protects against the scenario where you name your spouse, but they pass away a year later and you forget to update the form.
If your primary beneficiary is still alive when you die, they get all the money and the contingent beneficiary gets nothing. If your primary beneficiary has already died, the bank pays the contingent beneficiary instead. If both are dead and you named no one else, the money goes to your estate and is distributed according to your will or your state's intestacy laws.
You can also name a tertiary (third) beneficiary, though most people stop at two. The more names you add, the more important it is to keep the form updated and to tell someone you trust where to find it after you die.
Changing or removing a beneficiary
You can change your beneficiary designation at any time while you are alive. Go back to your bank, ask for a new POD form, and name someone different. The new form replaces the old one—you do not need the old beneficiary's permission, and they have no legal right to object.
If you want to remove a beneficiary entirely, fill out a new form that leaves the beneficiary line blank, or ask your bank if they have a cancellation form. Once the bank processes it, the account no longer has a POD designation, and the money will go to your estate when you die.
Life changes—divorce, estrangement, a new child—make updates necessary. Review your beneficiary designations every few years or whenever your family situation changes. If you do not update them, the bank will pay whoever is named on the form, even if you would have wanted someone else to have the money.
How the beneficiary collects the money after you die
After you die, the beneficiary contacts the bank and provides a certified copy of your death certificate. The bank will also ask for the beneficiary's photo ID and may ask them to sign a claim form. Processing usually takes two to four weeks, though some banks move faster.
The bank does not need permission from your executor or anyone else—the POD designation overrides your will. This is one of the main reasons people use it: the money reaches the beneficiary quickly, without court delays or legal fees. The beneficiary can then withdraw the money, transfer it to their own account, or leave it in the account if they choose.
If you named multiple beneficiaries, each one contacts the bank separately with their own death certificate and ID. The bank divides the balance according to the percentages or equal split you specified on the form.
POD accounts and taxes
Naming a POD beneficiary does not create a tax problem during your lifetime. The account is still yours, and you report all interest and dividends on your own tax return.
After you die, the beneficiary does not owe income tax on the money itself—it is not income to them, it is an inheritance. However, if the account earned interest between your last tax return and your death, that interest is taxable to your estate. Your executor or the person handling your taxes will report this on a final tax return.
If the account is very large, your estate might owe federal estate tax, but this depends on the total value of everything you owned and the year you died. State estate taxes vary. A tax professional or estate attorney can tell you whether this applies to your situation.
When POD beneficiaries do not work
Retirement accounts—IRAs, Roth IRAs, 401(k)s, and similar accounts—do not use POD designations. They have their own beneficiary forms, and the rules are different. If you have a retirement account, you need to name a beneficiary on that account separately, not on your bank account.
Joint accounts work differently too. If you own an account jointly with someone else and the account is set up as "joint tenants with rights of survivorship," the surviving owner gets the money automatically when you die. You cannot override this with a POD designation. If you want a different person to receive the money, you would need to remove the joint owner or set up a separate account.
Trust accounts also have their own rules. If your account is titled "in trust for" a specific person, that person receives it when you die, and a POD designation may not be allowed or may conflict with the trust language. Ask your bank whether your account type supports POD before you assume it does.
Frequently Asked Questions
Can a beneficiary access my account before I die?
No. A POD beneficiary has no access to the account during your lifetime. Only you can withdraw money or make changes. The beneficiary's rights begin only after you die and they provide a death certificate to the bank.
What if I name someone and then change my mind?
You can change or remove the beneficiary anytime by submitting a new form to your bank. The new designation replaces the old one immediately. The previous beneficiary has no legal claim to the money once you update the form.
Can I name my minor child as a beneficiary?
Yes, but the bank will not release the money to a minor. When you die, the money will be held until the child reaches the age of majority (usually 18 or 21, depending on your state). You may want to name an adult guardian or trustee instead, or set up a trust to manage the money for the child.
Does naming a POD beneficiary affect my will?
No. The POD designation is separate from your will. The money in the account goes to the beneficiary you named, not to whoever your will says should get it. This is why it is important to keep your beneficiary form and your will in sync if you want the same person to receive everything.
What if the beneficiary dies at the same time I do?
If you named a contingent beneficiary, they receive the money. If you did not, the money goes to your estate and is distributed according to your will or your state's intestacy laws. This is why naming a backup beneficiary is a good idea.