Yes, you can name a beneficiary on most bank accounts, and it bypasses probate when you die

A beneficiary on a bank account is a person you name to receive the money in that account after you die. When you name a beneficiary, that money passes directly to them outside of probate — the legal process that normally distributes your assets. The account itself does not become part of your estate.

Most banks offer this feature. It is called different things depending on the bank: "payable on death" (POD), "transfer on death" (TOD), or "in trust for" (ITF). The mechanics are the same. You fill out a form, name one or more people, and the bank keeps that information on file. While you are alive, you keep full control of the account and can change or remove the beneficiary anytime.

The beneficiary has no rights to the money while you are alive — not even to see the account balance. They only receive the funds after you die, and only if you have not spent the money or changed the beneficiary before then.

Key Takeaways

  • You can name a beneficiary on savings accounts, checking accounts, and money market accounts at most banks, but not on joint accounts where someone else is already an owner.
  • Money left to a beneficiary passes directly to them and does not go through probate, which can save time and money for your family.
  • You can name multiple beneficiaries and decide what percentage each one receives, or name them in order so the next person gets the money only if the first one has died.
  • You keep complete control of the account while alive — the beneficiary cannot access it, and you can change or remove them at any time.
  • The process takes minutes at your bank and usually costs nothing, but the rules vary slightly by state and by bank, so ask your bank what forms you need.

What types of accounts can have a beneficiary

You can name a beneficiary on most deposit accounts: savings accounts, checking accounts, and money market accounts. The feature is standard at banks, credit unions, and online banks. A few account types do not allow it. You cannot name a beneficiary on a joint account where someone else is already listed as an owner — the account automatically goes to the surviving owner instead.

You also cannot name a beneficiary on a business account or a trust account. If you have a certificate of deposit (CD), most banks will let you name a beneficiary on it, though a few require you to name the beneficiary when you open the CD rather than adding one later.

Ask your bank directly whether your specific account type allows a beneficiary. The answer depends on the bank's rules and sometimes on your state. If your bank does not offer the feature, you can move the money to an account that does.

How to name a beneficiary at your bank

The process is straightforward. Go to your bank in person, call them, or log into your online account and look for a section called "beneficiary," "payable on death," or "account settings." Some banks let you add a beneficiary entirely online. Others require you to fill out a form in person or by mail.

You will need the beneficiary's full legal name and usually their Social Security number or tax ID. If you name multiple beneficiaries, you will specify what percentage of the account each one receives. For example, you might leave 50% to your spouse and 25% each to two children. Some banks also let you name them in order — a primary beneficiary and one or more contingent beneficiaries who receive the money only if the primary beneficiary has died before you.

The bank will ask you to confirm the information and sign the form. There is no cost. Keep a copy for your records and tell your family members or executor where to find it. The bank keeps the beneficiary information in their system, so you do not need to file anything with the court or the state.

What happens to the money after you die

When you die, your family or executor notifies the bank and provides a death certificate. The bank verifies that you are the account owner and that the beneficiary is listed in their system. They then transfer the money directly to the beneficiary. This usually takes one to three weeks, though it can be faster if the bank processes it quickly.

The beneficiary does not have to go to court or wait for probate. The money is not part of your taxable estate for federal tax purposes (though state rules vary, and very large accounts may have other tax implications). The beneficiary receives the full amount unless you named multiple beneficiaries, in which case each receives their percentage.

If the beneficiary has died before you, the money goes to the contingent beneficiary if you named one. If you did not name a contingent beneficiary and the primary beneficiary is dead, the money becomes part of your estate and goes through probate like any other asset.

Changing or removing a beneficiary

You can change the beneficiary anytime while you are alive. Contact your bank, fill out a new form, and the old beneficiary is replaced. You can also remove a beneficiary entirely, which means the account will go through probate when you die unless you name someone else.

Some banks let you change the beneficiary online. Others require you to do it in person or by mail. If you are changing the beneficiary because of a divorce or a family dispute, ask the bank whether they require any additional documentation — some banks ask for a court order or a signed statement from you confirming the change.

Keep the bank updated if your circumstances change. If you name your spouse as beneficiary and then divorce, the beneficiary designation usually stays in place unless your divorce decree says otherwise. It is your responsibility to update it.

Beneficiaries and your will or trust

A beneficiary designation on a bank account is separate from your will or trust. If your will says the money should go to your children but your bank account names your ex-spouse as beneficiary, the bank account goes to your ex-spouse. The beneficiary designation overrides what your will says.

This is why it matters to keep your beneficiary designations up to date. If you have a trust and you want the account to go into the trust, you can name the trust as the beneficiary. If you want the money to go to your estate so it can be distributed according to your will, do not name a beneficiary — let the account go through probate.

Talk to an estate planning attorney if you have a complex situation — for example, if you have minor children, a blended family, or significant assets. They can help you decide whether a beneficiary designation, a trust, or a will is the right tool for your situation.

State rules and special situations

Most states allow beneficiary designations on bank accounts, but the rules vary slightly. Some states call it "payable on death," others use "transfer on death," and a few have their own rules about how the money is taxed or distributed. Your bank can tell you what applies in your state.

If you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin), the rules about what counts as your separate property versus marital property may affect the beneficiary designation. If you are married and you name someone other than your spouse as beneficiary, your spouse may have rights to part of the account depending on your state's laws.

If you are on Medicaid or you receive benefits that are means-tested, naming a beneficiary does not protect the account from being counted as an asset. The account is still yours while you are alive, so it still counts toward your benefit limits. After you die, the money goes to the beneficiary and is not part of your estate, so it does not affect your Medicaid recovery claim.

Frequently Asked Questions

Can a beneficiary access my account while I am still alive?

No. A beneficiary has no rights to the account while you are alive. They cannot see the balance, make withdrawals, or access the money in any way. Only you can do that. The beneficiary only receives the money after you die.

What if I name multiple beneficiaries and one of them dies before me?

If you named them as equal beneficiaries (each getting a percentage), the money that would have gone to the deceased beneficiary goes to your estate and is distributed according to your will. If you named a primary beneficiary and contingent beneficiaries, the contingent beneficiary receives the money instead.

Does naming a beneficiary cost money?

No. Banks do not charge a fee to add, change, or remove a beneficiary. The service is free.

Can I name a minor as a beneficiary?

Yes, but the money cannot be given directly to a minor. When you die, the bank will hold the money or give it to a court-appointed guardian or trustee until the minor reaches the age of majority (usually 18). Ask your bank what happens in your state.

What if I want the money to go to my estate instead of a specific person?

Do not name a beneficiary. Leave the beneficiary field blank, and the account will be part of your estate when you die. It will go through probate and be distributed according to your will or your state's intestacy laws.