Yes, you can name a beneficiary on most bank accounts, and the money goes directly to them when you die
Most banks let you name a payable-on-death (POD) beneficiary on checking and savings accounts. When you pass away, that money skips probate and goes straight to the person you named—no court involvement, no waiting. The bank handles the transfer once they see a death certificate.
Some accounts also allow transfer-on-death (TOD) designations, which work the same way. The key difference is naming: POD is the term banks use; TOD is what some states call it for other account types. Either way, the result is the same—your beneficiary gets the money directly.
Not every bank offers this on every account type. Money market accounts and CDs usually allow it. Some banks restrict it to savings accounts only. Call your bank or check your account agreement to confirm what's available to you.
Key Takeaways
- Payable-on-death beneficiaries receive the account balance directly after you die, without the account going through probate court.
- You can name one or more beneficiaries and decide how much each person receives, or split it equally.
- The beneficiary designation overrides what your will says, so if your will names someone else, the POD beneficiary gets the money instead.
- You can change or remove a beneficiary at any time while you're alive by contacting your bank.
- The money in the account remains yours to use during your lifetime—naming a beneficiary does not give them access now.
How to set up a beneficiary on your account
Contact your bank directly—by phone, in person, or through their website. Ask to add a payable-on-death beneficiary. The bank will give you a form to fill out with the beneficiary's full legal name, date of birth, and Social Security number or tax ID.
You can name more than one beneficiary. You decide whether they split the money equally or whether one person gets a larger share. For example, you could name your two children as 50/50 beneficiaries, or name one child as 60% and another as 40%.
Some banks let you do this online through your account dashboard. Others require a form signed in front of a witness or notary. A few still require you to visit a branch in person. Ask your bank which method they use—it usually takes less than 10 minutes once you have the beneficiary's information ready.
Keep a copy of the completed form for your records. The bank keeps a copy too, but having your own means you can confirm the details later if needed.
What happens to the account after you die
When you pass away, your beneficiary contacts the bank with a death certificate. The bank verifies the certificate and transfers the full account balance to the beneficiary. This usually takes one to three weeks, depending on the bank's process.
The beneficiary does not need a lawyer or court order. The POD designation is a legal instruction from you to the bank, and the bank follows it directly. This is why POD accounts are often called a "poor person's will"—they accomplish the same goal without the cost or delay of probate.
If you name multiple beneficiaries, each one receives their share. If one beneficiary dies before you do, most banks will split that person's share equally among the surviving beneficiaries, unless you specified otherwise. Check your bank's rules on this.
How POD beneficiaries differ from joint account owners
A joint account owner can access and withdraw money right now, while you're alive. A POD beneficiary cannot touch the account until after you die. That's the main difference.
If you add someone as a joint owner, they have full control of the account immediately. If you only want them to receive the money after you're gone, use POD instead. This protects the money from being spent or lost while you're still living.
Some people use both: they add a spouse or adult child as a joint owner for everyday access, and name other beneficiaries (like grandchildren or a charity) to receive what's left when they die. The POD beneficiaries only get paid if there's money in the account at that time.
POD beneficiaries and your will or trust
The POD designation overrides your will. If your will says your money goes to your brother but your POD form names your sister, your sister gets the account. The bank follows the POD form, not the will.
This matters if you update your will but forget to update your beneficiary form. The older POD designation stays in effect unless you change it. Before you write or update a will, review all your bank accounts and make sure the beneficiary names match your wishes.
If you have a living trust, you may want to name the trust as the POD beneficiary instead of naming individuals. This keeps the money in the trust and gives the trustee control over how it's distributed. Talk to an attorney about whether this makes sense for your situation.
What to do if you want to change or remove a beneficiary
You can change your beneficiary at any time while you're alive. Contact your bank and ask for a new beneficiary form. Fill it out with the new person's information, sign it, and submit it. The bank will update their records and the old beneficiary is removed.
If you want to remove a beneficiary without naming a new one, you can do that too. The account will then have no POD designation, and the money will go through your estate when you die. This means it will be distributed according to your will or, if you have no will, according to your state's laws.
Some life changes that prompt beneficiary updates: divorce, remarriage, birth of a child, or a change in your financial goals. Review your beneficiary designations every few years to make sure they still reflect what you want.
Taxes and what your beneficiary owes
Your beneficiary does not owe federal income tax on the money they receive from a POD account. The account balance is not considered income to them—it's a transfer of assets you already owned.
However, if the account earned interest or dividends before you died, that interest may be taxable to your estate. Your bank will send a 1099 form showing how much interest was earned in the year you died. Your executor or estate administrator handles this tax, not the beneficiary.
State inheritance taxes vary. Some states tax money passed to beneficiaries; most do not. Check your state's rules or ask an accountant if you live in a state with an inheritance tax.
Frequently Asked Questions
Can I name a minor as a POD beneficiary?
Yes, but the money cannot be released to them until they reach the age of majority (usually 18 or 21, depending on your state). The bank will hold the funds or require a court-appointed guardian to manage the money until then. Some people name an adult as beneficiary instead and trust them to use the money for the child's benefit, or they set up a trust to handle this.
What if my beneficiary dies before I do?
Most banks will split that person's share among your other beneficiaries. Some banks will return the money to your estate instead. Check your bank's policy. You can also update your beneficiary form to name a backup or contingent beneficiary who receives the money if your first choice dies before you.
Does naming a POD beneficiary affect my credit or my ability to borrow?
No. A POD designation is just instructions for what happens after you die. It does not change your credit score, your debt, or your ability to get a loan. The money in the account is still yours to use or borrow against while you're alive.
Can my creditors go after money in a POD account?
Generally, no. Once you die, the money goes directly to the beneficiary and is not part of your estate, so creditors cannot claim it. However, if you die with unpaid debts, your state's laws may allow creditors to pursue other assets in your estate first. Talk to an attorney if you have significant debts and want to understand how this works in your state.
Can I change my mind after I name a beneficiary?
Yes, completely. You can change the beneficiary, add more beneficiaries, remove all beneficiaries, or close the account entirely. As long as you're alive and of sound mind, the account is yours to control. Just contact your bank and request the change.