A TOD account passes money directly to a named person when you die, without going through probate

TOD stands for "transfer on death." It is a bank account—usually a savings or money market account—that you set up to send its balance to a specific person the moment you die. The bank holds the money in your name while you are alive, you control it completely, and you can change or cancel the TOD arrangement anytime. When you die, the bank transfers whatever is in the account directly to the person you named, and that person does not have to wait for probate court or deal with your will.

TOD accounts are different from joint accounts because the other person has no access to the money while you are alive. They also differ from accounts you name in your will, because a will goes through probate—a court process that can take months or years. A TOD account bypasses that entirely.

Key Takeaways

  • You keep full control of a TOD account during your lifetime; the named person cannot touch the money until you die.
  • When you die, the bank transfers the full balance directly to the person you named, outside of probate court.
  • You can change the named person or cancel the TOD arrangement at any time, as long as you are alive.
  • Not all banks offer TOD accounts, and the rules vary slightly by state, so check with your bank about what they call the feature.
  • A TOD account does not replace a will; it only covers that one account, not your other property or assets.

How a TOD account works during your lifetime

While you are alive, a TOD account functions like any other savings account. You deposit money, earn interest, withdraw funds, and pay fees exactly as you would with a regular account. The bank does not restrict your access or require permission from the person you named. You are the sole owner, and you have sole control.

The named person—sometimes called the "beneficiary"—has no legal claim to the money and cannot see the account balance, make withdrawals, or access it in any way. They do not even need to know the account exists. You can change your mind about who the beneficiary is, or remove the TOD designation entirely, without notifying them or asking permission.

What happens to the money when you die

When you die, the bank is notified (usually through your death certificate or a call from your family). The bank then transfers the entire balance in the account to the person you named. This transfer happens outside probate court, meaning no judge reviews it, no court fees apply, and the process is typically much faster than waiting for a will to be processed.

The named person will need to provide proof of your death and their own identity to the bank. They may need to sign paperwork, but the bank handles the transfer directly. The money goes to them free and clear—they do not owe anything to your estate or your other heirs just because they received it through the TOD account.

Differences between TOD accounts and joint accounts

A joint account gives both people access to the money right now. Either person can deposit, withdraw, or spend the funds. A TOD account gives access only to you while you are alive; the named person cannot touch it until you die. This makes TOD accounts safer if you want to leave money to someone but do not want them spending it before you pass away.

Joint accounts also create complications if one owner dies. Depending on your state and how the account is titled, the surviving owner may automatically own the full balance, or the money may go into your estate. A TOD account avoids this confusion because the transfer is automatic and clear.

Which banks offer TOD accounts and what they call them

Most large banks and credit unions offer TOD accounts, but not all, and they do not always use the term "TOD." Some banks call it "payable on death" (POD), "in trust for" (ITF), or "transfer on death." A few banks do not offer the feature at all. When you open an account or want to add a TOD designation to an existing account, ask your bank directly whether they support it and what paperwork you need to complete.

The rules for TOD accounts vary slightly by state. Some states have specific laws about how the account must be set up, whether you can name multiple beneficiaries, or what happens if the named person dies before you do. Your bank can tell you what applies in your state, or you can contact your state's banking regulator.

Setting up a TOD account or adding a beneficiary to an existing account

To set up a new TOD account, visit your bank in person or online and ask to open a savings or money market account with a TOD designation. You will need to provide the name and Social Security number (or tax ID) of the person you want to name as beneficiary. Some banks also allow you to name alternate beneficiaries in case your first choice dies before you do.

If you already have a savings account and want to add a TOD designation, contact your bank and ask how to do so. You may be able to do it online, by phone, or by visiting a branch. The bank will give you a form to sign. Keep a copy for your records, and make sure your family knows where to find it after you die.

What a TOD account does not cover

A TOD account only transfers that one account. It does not affect your house, car, investments, retirement accounts, or any other property. If you want those assets to go to someone when you die, you need a will, a trust, or other arrangements. Retirement accounts like IRAs and 401(k)s have their own beneficiary forms, which work similarly to TOD but are separate.

A TOD account also does not pay your debts or taxes. If you die owing money, creditors can still make claims against your estate. The TOD account may be protected from some creditor claims depending on your state, but it is not a way to hide money from people you owe.

Frequently Asked Questions

Can I name more than one person as beneficiary on a TOD account?

Many banks allow you to name multiple beneficiaries and specify how the money is split between them—for example, 50% to one person and 50% to another. Some banks do not offer this option. Ask your bank what they support before you set up the account.

What if the person I named as beneficiary dies before I do?

If you named only one person and they die first, the money goes into your estate and is handled according to your will or your state's inheritance laws. This is why some people name an alternate beneficiary. You can change the beneficiary anytime, so update it if the person you named passes away.

Can my creditors take money from a TOD account?

This depends on your state. In some states, TOD accounts are protected from creditors after you die. In others, creditors can make claims against the account before it is transferred to the beneficiary. Ask your bank or a lawyer in your state what the rules are.

Do I need a will if I have a TOD account?

A TOD account only covers that one account. You still need a will or trust to handle your house, car, other bank accounts, and personal property. A TOD account can be part of your overall plan, but it does not replace a will.

Can the person I name as beneficiary see the account or access it before I die?

No. The beneficiary has no legal right to the account while you are alive. They cannot see the balance, make withdrawals, or access it in any way. You have complete control until you die.