Yes, you can assign a beneficiary to most bank accounts, and it bypasses probate when you die
Most banks let you name a payable-on-death (POD) beneficiary on checking and savings accounts. When you die, the money in that account goes directly to the person you named—it does not go through your will or probate court. The process is usually free, takes a few minutes, and you can change or remove the beneficiary at any time while you are alive.
Not every account type supports this. Money market accounts and certificates of deposit (CDs) almost always do. Some banks restrict it on joint accounts or accounts with certain conditions. Your bank's rules matter more than federal law here, so you need to ask your specific bank what they allow.
Key Takeaways
- Payable-on-death beneficiaries receive the account balance directly after your death without going through probate or your will.
- You can name one or more beneficiaries, and you can change them at any time by contacting your bank.
- The beneficiary has no access to the account while you are alive, even if they are named.
- Some account types—joint accounts, trust accounts, or accounts with overdraft protection—may have restrictions on POD designations.
- You should review your beneficiary designation every few years or after major life changes like marriage, divorce, or the birth of children.
How to name a beneficiary at your bank
Contact your bank directly—by phone, in person, or through their website—and ask to add or change a payable-on-death beneficiary. Most banks have a form you fill out with the beneficiary's full name, date of birth, and Social Security number or tax ID. Some banks let you do this online through your account settings; others require you to visit a branch or call.
Keep a copy of the completed form for your records. The bank will keep the original on file. There is no cost to set this up, and it takes effect when ready. You do not need the beneficiary's permission, and they do not need to sign anything.
What happens when you name multiple beneficiaries
You can name more than one beneficiary on a single account. If you do, you need to decide how the money splits between them. Most banks offer two options: per stirpes (by branch of family—if one beneficiary dies before you, their share goes to their children) or per capita (equal split among all living beneficiaries at the time of your death).
If you name three people equally and one dies before you, per capita means the surviving two split the whole account. Per stirpes means the deceased person's share would go to their heirs. Ask your bank which method they use by default and whether you can choose.
Accounts where POD beneficiaries may not work
Joint accounts sometimes have restrictions. If the account is set up as "joint tenants with rights of survivorship," the surviving joint owner already has a claim to the money—adding a POD beneficiary can create confusion about who gets what. Some banks will not allow it; others will, but the joint owner's rights may take priority.
Trust accounts and accounts held in a business name usually cannot have POD beneficiaries because the account itself is not in your personal name. If you have a revocable living trust, the trust itself is the beneficiary of the account, not an individual person. Custodial accounts (accounts you hold for a minor) also typically do not support POD designations because the account already has a legal structure that determines what happens to the money.
What the beneficiary can and cannot do
While you are alive, the beneficiary has zero access to the account. They cannot withdraw money, see the balance, or make deposits. The account is entirely yours to use as you wish. You can spend all the money, close the account, or change the beneficiary without telling them.
After you die, the beneficiary must contact the bank with a death certificate and proof of their identity to claim the funds. The bank will verify they are the named beneficiary and transfer the money to them. This usually takes one to three weeks, depending on how quickly the beneficiary acts and how busy the bank is.
How POD beneficiaries interact with your will and estate
A POD designation overrides your will. If your will says the money goes to your child but you named your spouse as the POD beneficiary, your spouse gets the account. The account never enters probate, so the executor of your will cannot redirect it.
This is why it matters to keep your beneficiary designation in sync with your overall plan. If you get divorced and forget to remove your ex-spouse as the POD beneficiary, they will still get that account when you die—even if your will says otherwise. Some states have laws that automatically remove an ex-spouse from beneficiary designations after divorce, but not all do, so do not rely on that.
When to review or change your beneficiary
You should check your beneficiary designations every few years and definitely after major life events: marriage, divorce, the birth of children, a significant change in your finances, or if a named beneficiary dies. If you want to change the beneficiary, contact your bank with the same form you used to set it up initially. The change takes effect once the bank processes it.
If you want to remove a beneficiary entirely and leave the account to your estate (so it goes through probate and your will), you can do that too—just ask the bank to delete the POD designation. The account will then be treated like any other asset in your will.
Frequently Asked Questions
Can I name a minor as a POD beneficiary?
Yes, but the bank will not release the money to a minor directly. When you die, a court will likely appoint a guardian to manage the funds until the minor turns 18 or 21, depending on your state. You can avoid this by naming a custodian or trustee in your will to handle the money for the minor instead.
What if I name someone who dies before I do?
If you named one beneficiary and they die before you, the account becomes part of your estate and goes through probate unless you name a backup beneficiary. Many banks let you name a contingent or secondary beneficiary who receives the money if the first one dies. Ask your bank if this option is available.
Does naming a POD beneficiary affect my taxes?
No. The beneficiary does not pay income tax on the money they receive from a POD account—it is not considered income. However, if the account earned interest before your death, that interest may be subject to estate tax depending on the size of your total estate and your state's rules. Talk to a tax professional about your specific situation.
Can a creditor go after a POD account after I die?
In most states, POD accounts are protected from creditors once you die because the money goes directly to the beneficiary outside of probate. However, some states allow creditors to make claims against POD accounts in certain situations. Check your state's laws or ask your bank about creditor protections in your area.
What if I want to change my mind after naming a beneficiary?
You can change or remove a POD beneficiary at any time while you are alive. Contact your bank, fill out a new form, and the change takes effect once they process it. You do not need permission from the current beneficiary, and they do not need to know.