What a payable on death account is

A payable on death (POD) account is a bank account that passes directly to a person you name when you die, without going through probate or your will. The money skips the usual legal process and goes straight to that person — called the beneficiary — based on paperwork you fill out when you open the account.

You keep full control of the account while you are alive. You can spend the money, change the beneficiary, or close the account entirely. The beneficiary has no claim to the money and cannot access it until you die. The bank holds the account in your name alone, but with instructions about where it goes next.

POD accounts are sometimes called transfer on death (TOD) accounts, though TOD more often refers to investment accounts or securities. The mechanics are the same: you name who gets it, and it transfers outside the probate process when you pass.

Key Takeaways

  • A POD account passes to your named beneficiary when you die, without probate, based on a form you complete at the bank.
  • You control the account completely while alive — you can spend it, change the beneficiary, or close it anytime.
  • The beneficiary cannot touch the money or see the account balance while you are living.
  • Most banks offer POD accounts at no extra cost, and the process takes minutes when you open the account.
  • POD accounts work alongside your will and do not override it — they are a separate transfer mechanism.

How the transfer happens after you die

When you die, your beneficiary contacts the bank with a death certificate and proof of identity. The bank verifies your death, confirms the beneficiary's identity, and transfers the full account balance to them. This usually takes one to three weeks, depending on how quickly the beneficiary moves and how busy the bank is.

The beneficiary does not need a lawyer, does not need to go to court, and does not need to wait for probate to finish. The money is theirs to withdraw or keep in an account as soon as the bank processes the transfer. If you name multiple beneficiaries, the account splits among them according to the percentages you specified on the form — or equally if you did not specify.

If your named beneficiary dies before you do, the account goes to your estate and becomes part of probate unless you named a backup beneficiary. This is why it matters to review your POD form every few years and update it if your circumstances change.

Which banks offer POD accounts and what they cost

Nearly all banks and credit unions offer POD accounts on checking and savings accounts at no extra fee. You do not pay anything to set up the POD designation, and there is no annual charge. The account works exactly like a regular account — you get a debit card, online access, and the same interest rate — with the added instruction about where it goes when you die.

Some banks make you name a beneficiary when you open the account. Others let you add one later through online banking or by visiting a branch. A few still require you to come in person or mail a form, though this is becoming less common. Call your bank or check their website to see which method they use.

If you already have an account, you can usually add or change a POD beneficiary without closing it or moving your money. Log into online banking, call the customer service number on your statement, or visit a branch with your ID. The change takes effect when ready.

POD accounts versus joint accounts and trusts

A POD account is different from a joint account, where another person has access to the money while you are alive. With a POD account, only you can touch the money until you die. A joint account owner can withdraw funds, write checks, and make decisions about the account right now. A POD beneficiary cannot.

POD accounts are also simpler than a living trust, which requires a lawyer to set up and costs several hundred dollars. A trust gives you more control over how money is distributed — you can leave money to a minor in stages, for example, or set conditions on how it is spent. A POD account is all-or-nothing: the beneficiary gets the full balance when you die.

For straightforward situations — a spouse, adult child, or trusted friend who should get the money outright — a POD account is faster and cheaper than a trust. If you have minor children, complex assets, or specific wishes about how money should be used, a trust or will may serve you better. Many people use both: a POD account for liquid savings and a will or trust for everything else.

What happens if you do not name a beneficiary

If you open a POD account and never fill out the beneficiary form, the account has no POD designation. When you die, it becomes part of your estate and goes through probate like any other account. Your will determines who gets it, or state law does if you have no will.

This is why the beneficiary form matters even if you think you will get to it later. Many people open an account, intend to name someone, and never do. The account sits without a designation until they die, and their family ends up in probate court.

If you are unsure whether your account has a POD beneficiary, call the bank or log into online banking. Most banks show the beneficiary name and percentage right on the account details page. If you see nothing, or if it says "none" or "estate," you need to add one.

POD accounts and taxes

The money in a POD account is not taxed differently because of the POD designation. Your beneficiary receives it tax-free — they do not owe income tax on the transfer itself. However, if the account earned interest before you died, that interest is taxable income to your estate for the year you died.

POD accounts do count toward your taxable estate if you are wealthy enough that estate tax applies. In 2024, federal estate tax only affects estates over a certain threshold (this amount changes yearly), so most people do not owe it. Your state may have a lower threshold. A lawyer or accountant can tell you whether your estate will owe tax.

The beneficiary should keep the death certificate and the bank's transfer paperwork for their records. If the account earned interest after your death but before the transfer, the bank will issue a 1099 form showing that income, and your beneficiary may need to report it.

Updating or removing a POD beneficiary

You can change your POD beneficiary anytime while you are alive, as many times as you want. There is no waiting period, no penalty, and no need to tell the old beneficiary. Log into online banking, call the bank, or visit a branch with your ID and ask to update the beneficiary form.

If you want to remove the POD designation entirely — so the account goes through probate instead — you can do that too. Just tell the bank to remove the beneficiary. The account becomes a regular account with no transfer instruction.

Life changes often: you divorce, remarry, have children, or your relationship with someone shifts. Review your POD beneficiary every few years, especially after major life events. If you named someone years ago and that person is no longer in your life, update it. If you want to add a backup beneficiary in case your first choice dies before you, ask the bank if they allow contingent beneficiaries.

Frequently Asked Questions

Can I name more than one beneficiary on a POD account?

Yes. Most banks let you name multiple beneficiaries and specify what percentage each one gets. If you name two people at 50% each and die, they split the account equally. If you do not specify percentages, most banks split it equally among all named beneficiaries. Ask your bank how they handle multiple names.

What if my beneficiary is a minor when I die?

The money cannot go directly to a child under 18. The bank will hold it or transfer it to a court-appointed guardian or conservator. To avoid this, name an adult you trust — a spouse, older child, or sibling — and ask them to manage the money for the minor. Or use a trust instead, which lets you name a guardian and set rules for how the money is used.

Does a POD account override my will?

Yes. A POD account transfers outside your will. If your will says one person gets the account and your POD form names someone else, the POD beneficiary gets it. This is why it matters to keep your POD form and your will in sync, or you may accidentally leave money to the wrong person.

Can a creditor take money from a POD account after I die?

It depends on your state and the type of debt. Some states protect POD accounts from creditors once they transfer to the beneficiary. Others allow creditors to claim the money if your estate does not have enough assets to pay what you owed. Ask a lawyer in your state if you have significant debts and want to know how safe a POD account is.

Do I need a lawyer to set up a POD account?

No. You can set one up yourself at any bank in minutes. Fill out the beneficiary form with a name and relationship, and you are done. A lawyer is only useful if you have a complex situation — multiple properties, minor children, or large debts — where a will or trust makes more sense.