What a beneficiary is and why you might want one
A beneficiary is a person you name to receive the money in your account if you die. When you name a beneficiary on a bank account, that money passes to them outside of your will — it goes directly to them, usually within a few weeks of your death, without going through probate (the court process that normally handles your estate).
This is different from adding someone as a joint account holder. A joint holder can access and use the money while you're alive. A beneficiary cannot touch the account while you're alive — they only receive it after you pass away. Many people name a spouse, adult child, or trusted family member as a beneficiary for this reason.
Some accounts let you name multiple beneficiaries and decide what percentage each one receives. Others let you name a primary beneficiary and a backup (called a contingent beneficiary) in case the first person dies before you do.
Key Takeaways
- You can name a beneficiary on most savings accounts, checking accounts, and money market accounts by contacting your bank in person, by phone, or online.
- The beneficiary form is usually called a Payable on Death (POD) or Transfer on Death (TOD) designation, and it costs nothing to set up.
- A beneficiary has no access to your account while you're alive — the money only goes to them after you die.
- You can change or remove a beneficiary at any time during your lifetime by filling out a new form with your bank.
- Naming a beneficiary does not replace a will — you may still need one for other assets or to name a guardian for minor children.
How to name a beneficiary at your bank
Start by contacting your bank directly. Call the customer service number on the back of your debit card, visit a branch in person, or log into your online banking portal and look for an account settings or profile section. Ask to speak with someone about naming a beneficiary, or search for "beneficiary" or "POD" in the help section of your online account.
Your bank will give you a form — often called a Payable on Death (POD) form or Transfer on Death (TOD) form, depending on the state and the type of account. This form asks for the beneficiary's full name, date of birth, Social Security number, and relationship to you. Some banks also ask for their address and phone number.
You will sign the form in front of a bank employee (if you're at a branch) or submit it electronically through your online account. There is no fee for this. The bank keeps the form on file, and the designation takes effect when ready — but the beneficiary only receives the money after you die and the bank is notified of your death.
Naming multiple beneficiaries or a backup
If you want more than one person to receive your account, most banks let you name several beneficiaries and specify what percentage each one gets. For example, you might leave 50% to your spouse and 25% each to two adult children. The form will have space for this, or the bank employee can help you fill it in.
You can also name a contingent beneficiary — a backup person who receives the money if your first choice dies before you do. This is common when naming a spouse as primary and an adult child as contingent. If your spouse passes away first, the money goes to your child instead of to your spouse's estate.
If you name multiple beneficiaries and do not specify percentages, the account may be split equally among them, but this varies by bank and state. Ask your bank to confirm how they will divide the account before you sign the form.
What information you will need to provide
Have the beneficiary's full legal name ready — the name that appears on their driver's license or Social Security card, not a nickname. You will also need their date of birth and Social Security number. If the beneficiary is a minor, some banks require you to name a custodian (usually a parent or guardian) to manage the money until the child reaches adulthood.
If you are naming a beneficiary who lives outside the United States, ask your bank whether they have restrictions on international beneficiaries. Some banks can accommodate this; others cannot. It is better to ask before you fill out the form.
You do not need the beneficiary's permission to name them, and they do not need to sign anything. However, it is a good idea to tell them that you have named them, so they know to contact the bank after you pass away.
Changing or removing a beneficiary
You can change your beneficiary at any time while you are alive. Contact your bank and ask for a new POD or TOD form. Fill it out with the new beneficiary's information, sign it, and submit it to the bank. The new form replaces the old one — you do not need to do anything else.
If you want to remove a beneficiary without naming a new one, you can do that too. Some banks have a form specifically for removing a beneficiary; others let you submit a new form that leaves the beneficiary field blank. Ask your bank which method they use.
Keep in mind that if you remove a beneficiary and do not name a new one, the account will go through probate when you die — meaning it will be handled by the court and distributed according to your will or state law, which takes longer and may involve fees.
How the money reaches your beneficiary after you die
When you pass away, your family or the person handling your estate needs to notify the bank. They will provide a death certificate and the beneficiary's contact information. The bank will verify the information and transfer the account balance to the beneficiary, usually within two to four weeks.
The beneficiary does not have to go to court or hire a lawyer for this process — it happens directly between the bank and the beneficiary. This is one of the main reasons people use POD designations: it is faster and simpler than probate.
The money the beneficiary receives is not subject to federal income tax (it is not considered income to them), but it may be subject to state inheritance tax depending on where you live. The beneficiary should keep the bank's transfer records for their own records.
Beneficiaries and your will or trust
Naming a beneficiary on your bank account does not replace a will or trust. A will lets you name a guardian for minor children, leave instructions for your funeral, and distribute other assets like a house or car. A trust can hold multiple assets and may offer more control over how and when beneficiaries receive money.
If you have a will and also name a beneficiary on your account, the beneficiary designation takes priority — the account goes to the named beneficiary, not to whoever your will says should get it. This is why it is important to make sure your beneficiary choices match your overall plan for your estate.
If you do not have a will and do not name a beneficiary, the account will be distributed according to your state's laws, which usually means it goes to your spouse (if you have one) or your closest relatives. Naming a beneficiary gives you control over where the money goes.
Frequently Asked Questions
Can I name a minor as a beneficiary?
Yes, but most banks require you to name a custodian or guardian to manage the money until the child turns 18 or 21 (depending on state law). The custodian holds the money in trust and can use it for the child's needs. Ask your bank what age the child must reach before they can access the account directly.
What happens if my beneficiary dies before I do?
If you named only one beneficiary and they die before you, the account will go through probate when you die — it will not automatically go to their children or spouse. This is why naming a contingent beneficiary is a good idea. You can update your beneficiary at any time.
Can my beneficiary access the account while I'm still alive?
No. A beneficiary has no access to the account during your lifetime. Only you (and any joint account holders) can withdraw money or make changes. The beneficiary only receives the balance after you die and the bank is notified.
Do I need to tell my beneficiary that I named them?
You do not have to, but it is a good idea. If your beneficiary does not know about the account, they may not contact the bank after you die, and the money could sit unclaimed. Telling them also gives you a chance to explain your wishes and make sure they know how to reach the bank.
Can I name my bank account as a beneficiary to my will?
No, but you can do the opposite: name a person as a beneficiary on your bank account. Your will can name a beneficiary for other assets like a house or car, but a bank account beneficiary designation (POD or TOD) is separate and takes priority over your will.