Yes, you can name a beneficiary, and it bypasses probate when you die
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 beneficiary has no access to the account while you are alive, and you can change or remove the beneficiary at any time.
Not every bank calls it the same thing. Some use "POD," others say "in trust for" (ITF), and a few use "transfer on death" (TOD). The mechanics are identical: you fill out a form, name the person, and the bank records it. When you die, you present a death certificate and the account is theirs.
This is different from making someone a joint owner. A joint owner can withdraw money right now. A POD beneficiary cannot touch the account until you die and they prove it to the bank.
Key Takeaways
- You can name a POD beneficiary on most checking and savings accounts at no cost, and change it whenever you want.
- The beneficiary has zero access to your money while you are alive—they cannot withdraw, see the balance, or close the account.
- When you die, the money goes to the beneficiary directly and does not pass through probate or your will.
- You will need to tell the bank the beneficiary's full legal name and usually their Social Security number or date of birth.
- If you name multiple beneficiaries and do not specify how to split the money, most banks divide it equally among them.
How to set up a POD beneficiary at your bank
Call your bank or visit a branch and ask to name a payable-on-death beneficiary. They will give you a form—sometimes called a "Beneficiary Designation Form" or "POD Addendum." You fill in the beneficiary's full legal name, their relationship to you (optional at most banks), and often their Social Security number or date of birth so the bank can identify them later.
Sign the form in front of a bank employee. Most banks do not require a witness or notary, but a few do—ask before you sign. The bank keeps a copy and gives you one. Write down the date you completed this, because if you ever need to change it, you will want to know when the original was filed.
The whole process takes 10 to 15 minutes. There is no fee. If your bank says they do not offer POD accounts, ask whether they offer "transfer on death" or "in trust for" accounts instead—they may use different language but offer the same thing.
What happens when you die
When you die, your beneficiary contacts the bank with a death certificate and a government-issued ID. They do not need your will, do not need to go to probate court, and do not need permission from anyone else. The bank verifies the death certificate, confirms the beneficiary's identity, and transfers the money. This usually takes one to three weeks.
The beneficiary receives the full account balance as of the date of death, minus any outstanding checks or pending transactions. If the account is overdrawn, the bank may deduct the overdraft before paying the beneficiary, depending on the bank's policy.
If you name multiple beneficiaries and do not specify how to divide the money, the account splits equally. If you want an unequal split—for example, 60 percent to one person and 40 percent to another—you must say so on the form. Some banks have a line for this; others require a separate written instruction. Ask when you fill out the form.
POD accounts and taxes
Naming a POD beneficiary does not reduce your taxes while you are alive. The account is still yours, and you report all interest and earnings on your tax return as usual.
When you die, the beneficiary does not owe income tax on the money they receive—it is not income to them, it is an inheritance. However, if the account earned interest between the last day of the previous year and the date of your death, that interest is still taxable income to your estate. The executor or administrator of your estate reports this on a final tax return.
If the account is very large, your estate may owe federal estate tax, but this only applies to estates over a certain threshold (which varies by year and is quite high). A POD account does not change whether estate tax applies—it just means the money avoids probate.
Naming multiple beneficiaries and what happens if one dies first
You can name more than one beneficiary on the same account. If you name three people and do not specify percentages, they each get one-third. If you name two people and one dies before you do, the surviving beneficiary gets the full amount—the deceased beneficiary's share does not go to their heirs or their estate.
If you want the money to go to a deceased beneficiary's children instead, you need to name those children as separate beneficiaries on the form. For example, you could write: "50% to my daughter Sarah, and if she dies before me, 50% to her children in equal shares." Not all banks allow this level of detail on the form itself, so ask your bank what language they accept.
If all your named beneficiaries die before you do, the money goes to your estate and is distributed according to your will or, if you have no will, according to your state's intestacy laws. This is why it is worth reviewing your beneficiary designation every few years, especially after major life changes.
Changing or removing a POD beneficiary
You can change your beneficiary at any time while you are alive. Contact your bank, ask for a new beneficiary designation form, fill it out with the new person's name, and sign it. The bank will replace the old form with the new one. Keep a copy for your records.
If you want to remove the beneficiary entirely and leave the account to your estate instead, you can do that too—just tell the bank to cancel the POD designation. The account becomes a regular account with no named beneficiary, and the money will pass through your will or probate.
Some banks require you to come in person to change a beneficiary; others let you do it by phone or mail. Ask your bank what their process is. If you are changing the beneficiary because of a divorce, check whether your state automatically cancels the ex-spouse's designation—some states do this by law, others do not.
POD accounts versus joint accounts and trusts
A POD beneficiary is not the same as a joint owner. A joint owner can withdraw money right now and has full access to the account. A POD beneficiary cannot touch the account until you die. If you want someone to help you manage money while you are alive, a joint account or a power of attorney is the right tool, not a POD designation.
A POD account is simpler than a living trust for small to medium accounts. A trust requires a lawyer to set up (usually $500 to $2,000), but it gives you more control over how the money is distributed and can cover multiple accounts and assets. A POD designation is free and takes 15 minutes. For a single account under $100,000, POD is usually the faster choice.
If you have a will, a POD account does not override it—the POD money simply does not go through probate. Everything else in your estate still follows your will. You can have both a will and POD accounts on the same accounts.
Frequently Asked Questions
Can a beneficiary see my account balance or transactions while I am alive?
No. A POD beneficiary has no access to the account until you die. They cannot see the balance, cannot make withdrawals, and cannot view statements. Only you and anyone you make a joint owner can access the account while you are alive.
What if I name my spouse as a POD beneficiary and then we divorce?
This depends on your state. Some states automatically cancel a spouse's POD designation when a divorce is final; others do not. After a divorce, contact your bank and update the beneficiary yourself to be safe. Do not assume the law handled it.
Can I name a minor as a POD beneficiary?
Yes, but the bank will not release the money to a minor when you die. The money will be held in trust or go to the minor's legal guardian or conservator. Ask your bank what happens in your state—some require a court order, others let a parent or guardian claim it. Consider naming an adult to manage the money for the minor instead.
Does naming a POD beneficiary affect my Social Security or government benefits?
No. A POD account is still your account while you are alive, so it counts toward any asset limits for means-tested benefits like Medicaid or SSI. After you die, the beneficiary receives the money and it does not affect their benefits unless they are on a means-tested program themselves.
What if the bank closes or merges with another bank?
Your POD designation transfers to the new bank. If your bank is acquired, contact the new bank and confirm your beneficiary is still on file. If your bank fails and is taken over by the FDIC, your POD account is still protected up to the deposit insurance limit, and the beneficiary designation remains valid.