Most bank accounts go through probate unless they have a named beneficiary or a co-owner
A bank account passes through probate if it is held only in the deceased person's name and has no named beneficiary. The executor of the estate must present the will and death certificate to the bank, and the account becomes part of the probate process. This means the account is frozen until the court approves the will, debts are paid, and the executor distributes what remains according to the will or state law.
Some accounts bypass probate entirely. These are accounts with a payable-on-death (POD) beneficiary, a transfer-on-death (TOD) designation, or accounts held as joint tenants with rights of survivorship. When the account holder dies, ownership passes directly to the named beneficiary or surviving co-owner outside of probate. The bank handles the transfer once you provide a death certificate and proof of the beneficiary's identity.
The difference matters because probate can take months or years, costs money in court and attorney fees, and makes the account public record. Accounts that bypass probate are usually accessible within weeks.
Key Takeaways
- A bank account held only in one person's name with no beneficiary designation goes through probate and is frozen until the court process is complete.
- Payable-on-death (POD) and transfer-on-death (TOD) designations let you name a beneficiary who receives the account directly, bypassing probate.
- Joint accounts with rights of survivorship pass to the surviving co-owner automatically, but joint accounts held as tenants in common go through probate for the deceased owner's share.
- The bank will not release funds from a probate account until the executor presents a court order or letters testamentary showing authority to access the account.
How probate affects a single-name bank account
When a bank account is titled in one person's name only and that person dies without naming a beneficiary, the account becomes part of the probate estate. The bank will freeze the account once it learns of the death. No one can withdraw money, not even the spouse or adult children, until the probate court gives permission.
The executor named in the will (or appointed by the court if there is no will) must file the will with the probate court in the county where the deceased lived. The court then issues letters testamentary or letters of administration, which are documents proving the executor has the legal right to manage the estate. The executor presents these letters to the bank along with a death certificate and the account is released.
During this time, the account may earn little or no interest, and the executor may need to pay court filing fees, attorney fees, and other probate costs. The account balance is also public record once the will is filed.
Payable-on-death accounts and how they work
A payable-on-death (POD) account is a regular bank account with a named beneficiary. You set this up by filling out a form at the bank when you open the account or at any time afterward. You name one or more people to receive the money when you die. Until your death, the account is entirely yours—the beneficiary has no access and no claim to the money.
When you die, the beneficiary contacts the bank with a death certificate and proof of identity. The bank transfers the account balance directly to the beneficiary. This happens outside probate and usually takes one to three weeks. The account does not go through the court system and does not become public record.
POD accounts are available at most banks and credit unions. Some banks call them "in trust for" accounts or use similar language. Ask your bank whether they offer this option and what form you need to sign. You can change the beneficiary at any time while you are alive, and you can name multiple beneficiaries to split the account.
Transfer-on-death registration for investment and brokerage accounts
A transfer-on-death (TOD) registration is similar to a POD account but applies to brokerage accounts, stocks, bonds, and mutual funds rather than bank accounts. When you register an account as TOD, you name a beneficiary who receives the investments directly when you die, without probate.
Not all states allow TOD registration for all types of accounts. Some states permit it for brokerage accounts but not for individual stocks. Check with your brokerage firm or financial institution about whether TOD is available and what the process is. Like POD, you can change the beneficiary at any time and the account remains entirely yours until your death.
The beneficiary receives the investments at their market value on the date of death. If you own mutual funds or stocks worth $50,000 when you die, the beneficiary receives $50,000 worth of those investments (or their current value), not the original purchase price.
Joint accounts and what happens when one owner dies
How a joint account is treated in probate depends on how it is titled. The two most common forms are joint tenants with rights of survivorship and tenants in common.
With joint tenants with rights of survivorship, when one owner dies, the surviving owner automatically owns the entire account. The account does not go through probate. The surviving owner can access the account when ready by presenting a death certificate to the bank. This is the default for most joint accounts at banks, though you should confirm with your bank how your account is titled.
With tenants in common, each owner owns a separate share of the account. When one owner dies, that person's share goes through probate. The executor must settle the deceased owner's debts and taxes before the surviving owner receives the deceased owner's share. This is less common for bank accounts but more common for real estate or investment accounts. Ask your bank which form your joint account uses.
A joint account also has a tax consequence: if one owner contributed all the money and the other contributed nothing, the IRS may treat the entire account as belonging to the person who funded it, which can affect estate taxes. Consult a tax professional if the account is large or if the owners contributed unequally.
What happens if there is a will but no beneficiary designation
If the will names a specific person to receive a bank account but the account itself has no POD or TOD designation, the account still goes through probate. The will controls who receives the money, but the probate process must happen first. The executor presents the will to the court, the court approves it, and then the executor can access the account and distribute it according to the will's instructions.
This is slower than a POD or TOD account because it requires court involvement. However, it gives you more control: you can change your mind about who receives the money by changing your will, and you can name alternate beneficiaries in case the first choice dies before you do.
Some people use both methods: they name a beneficiary on the account itself and also mention the account in the will. If the named beneficiary dies before you do, the will can direct what happens to the account instead of leaving it unclear.
How to check what type of account you have
Call your bank or log into your online account and look for account details or account registration information. The bank's website or statement should show whether the account is titled in one name, as joint tenants with rights of survivorship, or as tenants in common. If you do not see this information, ask a bank representative directly.
For beneficiary designations, ask whether the account has a POD beneficiary on file. The bank can tell you the name of the person listed and when the designation was last updated. If you want to add or change a beneficiary, the bank will provide the form. This takes just a few minutes and costs nothing.
If you have accounts at multiple banks or with a brokerage firm, check each one separately. Designations do not transfer between institutions. A POD beneficiary at one bank does not automatically explore to an account at another bank.
Frequently Asked Questions
Can a surviving spouse access a joint bank account right after death?
Yes, if the account is titled as joint tenants with rights of survivorship. The surviving spouse can usually access the account within a few days by presenting a death certificate to the bank. If the account is titled as tenants in common, the surviving spouse's share is frozen until probate is complete, which can take several months.
What if I die without a will and have no beneficiary on my account?
The account goes through probate. The court will appoint an administrator (similar to an executor) to manage your estate. State law determines who receives the money—usually a spouse first, then children, then parents or siblings. This process is slower and more expensive than a named beneficiary.
Can I name my estate as the beneficiary on a POD account?
Yes, but this defeats the purpose. If you name your estate as the POD beneficiary, the account still goes through probate because the money goes to the estate, not directly to a person. Name a person instead if you want to avoid probate.
Do I need a lawyer to set up a POD account or change a beneficiary?
No. You can do this yourself at the bank by filling out a form. It takes a few minutes and costs nothing. A lawyer is helpful only if you have a complex estate or want to coordinate the account with other planning documents like a will or trust.
What if the POD beneficiary dies before I do?
The account goes through probate because there is no named beneficiary at the time of your death. You can prevent this by naming an alternate beneficiary on the account, or by mentioning the account in your will so the court knows who should receive it if the first beneficiary is already dead.