POD stands for "Payable on Death" and lets you name someone to inherit money in your account without going through probate
A POD designation is an instruction you give your bank that says: when I die, transfer the money in this account directly to the person I name. The person you name—called the beneficiary—gets the account balance automatically. They do not have to wait for a will to be read or a court to approve the transfer. The money bypasses your estate entirely.
POD is one of the simplest ways to pass money to someone after you die. It costs nothing to set up, takes a few minutes, and overrides what your will says about that specific account. If your will leaves your bank account to one person but your POD names another, the POD beneficiary gets the money.
The account remains yours while you are alive. You can spend it, close it, or change the beneficiary whenever you want. The person you name has no access to the account during your lifetime—they cannot withdraw money or see the balance. They only inherit if you die while the account is still open and has money in it.
Key Takeaways
- POD lets you name someone to inherit your bank account directly after you die, without probate or court involvement.
- You keep full control of the account while alive and can change or remove the beneficiary at any time.
- The beneficiary has no access to the account during your lifetime and cannot see the balance or make withdrawals.
- Most banks offer POD at no cost, and you can set it up by phone, in person, or online depending on your bank.
- If you name multiple beneficiaries, most banks split the account balance equally among them unless you specify different percentages.
How to add a POD beneficiary to your account
Contact your bank and ask to add a POD designation to your checking or savings account. You will need the beneficiary's full legal name and usually their date of birth. Some banks also ask for their Social Security number or address, though this varies.
Most banks let you set this up by calling customer service, visiting a branch in person, or logging into your online banking portal. A few banks have you sign a form; others just record the information over the phone. Ask your bank which method they use and whether they charge a fee—most do not.
You can name one person or multiple people. If you name more than one, specify whether they split the money equally or in different percentages. For example, you might say 60% to your daughter and 40% to your son. If you do not specify percentages, most banks divide the balance equally.
After you set it up, ask the bank to confirm the beneficiary information in writing. Keep that confirmation with your important documents. If you move accounts or switch banks, the POD does not transfer—you have to set it up again at the new bank.
POD versus other ways to pass money after death
POD is different from a will, a trust, and joint account ownership—and each has different consequences. A will requires probate, which means a court oversees the transfer and can take months or years. A revocable living trust also avoids probate but costs money to set up and requires you to transfer the account into the trust's name. Joint ownership means the other person can access and spend the money while you are alive, which POD does not allow.
POD is faster than a will because there is no court process. It is cheaper than a trust because there are no legal fees. It is safer than joint ownership because the other person cannot touch the money until you die. The tradeoff is that POD only works for bank accounts—it does not cover your house, car, investments, or other property.
Some people use POD for one account and a will or trust for everything else. Others use POD for their main savings account and name the same person in their will as backup. There is no single right answer; it depends on what you own and who you want to inherit it.
What happens when the account owner dies
When you die, the beneficiary contacts the bank and provides a death certificate. The bank verifies the certificate, confirms the POD designation in their records, and transfers the account balance to the beneficiary. This usually takes one to three weeks, though some banks are faster.
The beneficiary does not need a lawyer or court order. They do not have to go through probate. They simply show up with the death certificate and identification, and the bank handles the rest. If there are multiple beneficiaries, the bank divides the money according to the percentages you set.
If the account has a negative balance—meaning you owed the bank money—the bank may keep the inheritance to cover the debt. This varies by bank and by state law. If you are concerned about this, ask your bank what happens to a POD account if the owner dies with an overdraft.
Changing or removing a POD beneficiary
You can change the beneficiary at any time while you are alive. Contact your bank, give them the new beneficiary's name and information, and ask them to update the designation. The bank will send you a confirmation. The old beneficiary has no say in this and does not have to be notified.
You can also remove the POD designation entirely, which means the account becomes part of your estate and is handled according to your will or state law. To do this, contact your bank and ask them to delete the POD. Again, confirm the change in writing.
If you get divorced, check whether your ex-spouse is still named as the POD beneficiary. Some states automatically remove an ex-spouse from POD designations after divorce, but not all do. It is safer to contact your bank and make the change yourself rather than assume it happened automatically.
POD and taxes, debt, and creditors
Money inherited through POD is not subject to federal income tax. The beneficiary does not report it as income. However, if the account earned interest before you died, that interest may be taxable to your estate—ask your bank or a tax professional about this.
If you owe money when you die—credit card debt, medical bills, a mortgage—creditors can sometimes claim money from a POD account to pay what you owed. The rules vary by state. Some states protect POD accounts from creditors; others do not. If you have significant debt, talk to a lawyer about whether POD is the right choice for you.
If you receive government benefits like Medicaid or Supplemental Security Income (SSI), inheriting money through POD counts as income and may affect your benefits. If you are the beneficiary on someone else's POD account, check with your benefits administrator before the person dies so you understand the consequences.
Common mistakes to avoid with POD
The most common mistake is naming a beneficiary and then forgetting about it. Years later, your life changes—you get divorced, have a falling out with a family member, or want to leave money to someone else—but the old POD is still there. Review your POD designations every few years, especially after major life events.
Another mistake is naming a minor as the beneficiary. If a child inherits money through POD, the bank will not release it to them until they turn 18 or 21, depending on state law. The money sits in the account, and no one can access it. If you want to leave money to a child, consider naming an adult trustee instead or using a trust.
A third mistake is assuming POD works the same way at every bank. Rules about multiple beneficiaries, percentages, and what happens if a beneficiary dies before you vary by bank and by state. Ask your specific bank how they handle these situations.
Frequently Asked Questions
Can I name my estate as the POD beneficiary?
No. The whole point of POD is to avoid probate, so naming your estate defeats that purpose. If you want the money to go through probate, simply do not set up a POD and let your will handle it.
What if the beneficiary dies before I do?
The money goes to your estate and is handled according to your will or state law. Some banks let you name a backup beneficiary to inherit if the first one dies first, but not all. Ask your bank whether they offer this option.
Does POD work the same way at credit unions?
Most credit unions offer POD, but the process and rules can differ from banks. Contact your credit union directly to find out how they handle POD designations and whether they charge a fee.
Can a creditor take money from a POD account after I die?
It depends on your state. Some states protect POD accounts from creditors; others allow creditors to claim the money to pay debts. Talk to a lawyer in your state if you have significant debt and are worried about this.
If I have a will that says something different, does the POD override it?
Yes. The POD designation takes priority over your will for that specific account. If your will says your son gets the account but your POD names your daughter, your daughter gets the money.