Most bank accounts do go through probate, unless they have a payable-on-death designation or a surviving owner
A bank account enters probate — the court process that settles an estate — unless you set it up in a way that bypasses the court. The default is probate. A regular savings or checking account with only your name on it will be treated as part of your estate when you die, which means the court gets involved, it takes time, and your heirs wait to access the money.
You can prevent this by naming a payable-on-death beneficiary (sometimes called a POD beneficiary) on the account before you die, or by opening a joint account with a right of survivorship. Both of these methods let the money pass directly to the person you name, without going to court. The key is setting this up while you're alive — you cannot do it in your will.
Key Takeaways
- A bank account with only your name on it goes through probate unless you name a payable-on-death beneficiary or add a joint owner with survivorship rights.
- Payable-on-death designations are free to set up at your bank and override what your will says, so the person you name on the account gets the money, not whoever your will names.
- Joint accounts with right of survivorship pass to the surviving owner automatically, but they also give that person access to the money while you are alive.
- You must name the beneficiary or add the joint owner before you die — your will cannot create these designations after the fact.
- Probate can take several months to over a year depending on your state and the size of your estate, so naming a beneficiary speeds up access to the money.
How payable-on-death accounts work
A payable-on-death account is a regular bank account — checking, savings, or money market — with a named beneficiary attached to it. When you die, the bank releases the money directly to that person. No court involvement, no waiting for probate to finish. The beneficiary straightforward brings a death certificate and identification to the bank, and the account is transferred into their name or paid out to them.
You can name one person or multiple people as beneficiaries. If you name more than one, you decide whether they split the money equally or whether one person gets a specific dollar amount and the rest goes to another. The bank will have a form for this — usually called a POD designation form or beneficiary designation form. You fill it out, sign it, and keep a copy. It costs nothing.
The payable-on-death designation overrides your will. If your will says your money goes to your sister but your POD form names your brother, your brother gets the account. This is why it matters to keep your designations up to date — if you get divorced, remarried, or your circumstances change, you need to update the form at the bank, not just change your will.
Joint accounts with right of survivorship
A joint account with right of survivorship is an account owned by two or more people. When one owner dies, the surviving owner automatically owns the entire account. Like a payable-on-death account, it bypasses probate — the surviving owner straightforward shows the death certificate to the bank and the account becomes theirs.
The difference is that a joint owner has access to the money while you are alive. Both owners can deposit, withdraw, and manage the account. This can be useful if you want a spouse or adult child to help manage your finances, but it also means that person can spend the money without your permission. Some people use joint accounts for this reason; others avoid them because they do not want to give someone else control.
Some states also recognize joint accounts without survivorship rights, where the account is straightforward split between the owners when one dies. These do go through probate. When you open a joint account, ask the bank explicitly whether it has survivorship rights — the answer should be in writing on the account agreement.
What happens to accounts that do go through probate
If you die with a bank account in your name alone and no payable-on-death beneficiary, the account becomes part of your estate. Your executor — the person named in your will to settle your affairs — cannot straightforward withdraw the money. They have to go to probate court, prove the will is valid, get court approval to act as executor, and then the court oversees the distribution of assets.
During this time, the account is frozen. No one can access it, not even to pay bills or cover funeral costs, until the court releases it. The timeline varies by state. Some states have expedited probate for small estates under a certain dollar amount (often $10,000 to $50,000, but this varies), which can be faster. Others require the full probate process no matter the size.
Probate also costs money. Court fees, executor fees, and attorney fees come out of the estate before anyone inherits. These costs are often a few hundred to a few thousand dollars depending on the state and the complexity of the estate. Naming a beneficiary or setting up a joint account avoids these costs and delays.
Accounts held in trust
If you create a living trust and fund it with a bank account, that account does not go through probate. The trust owns the account, and when you die, the trustee — the person you name to manage the trust — transfers the money to the beneficiaries you named in the trust document. This happens outside of court.
A living trust requires more paperwork than a payable-on-death designation. You have to create the trust document, sign it, and then retitle the account in the trust's name. But if you have multiple accounts or other assets, a trust can be simpler than naming beneficiaries on each account separately. Some people use a trust for this reason; others use payable-on-death designations because they are simpler and free.
State rules that affect your account
Some states have specific rules about joint accounts and survivorship. A few states presume that a joint account does not have survivorship rights unless the account agreement explicitly says it does. Others presume the opposite. When you open a joint account, the bank should tell you which rule applies in your state, but it is worth asking directly to make sure.
Some states also allow you to name a payable-on-death beneficiary on almost any account type. Others limit it to savings and checking accounts. A few states use different terminology — for example, "transfer on death" instead of "payable on death" — but the concept is the same. Your bank can tell you what options are available in your state.
How to set up a payable-on-death account or change an existing one
If you already have a bank account and want to add a payable-on-death beneficiary, contact your bank directly. You can usually do this in person at a branch, by phone, or sometimes online. Ask for the POD designation form or beneficiary designation form. You will need to provide the beneficiary's full name and usually their Social Security number or date of birth so the bank can identify them correctly.
If you are opening a new account, you can ask about payable-on-death options when you open it. The bank will ask if you want to name a beneficiary and can set it up on the spot. If you are opening a joint account, ask the bank to confirm in writing that it includes right of survivorship.
Keep a copy of any beneficiary designation form you sign. If you need to change it later — because your circumstances change or you want to name someone else — you will need to fill out a new form. The new form replaces the old one, so make sure the bank has removed the old designation from their records.
Frequently Asked Questions
Can I name my minor child as a payable-on-death beneficiary?
Yes, but the money cannot be released directly to a minor. When you die, the bank will hold the account until a court appoints a guardian for the child, or until the child reaches the age of majority (usually 18). To avoid this delay, some people name an adult as beneficiary with instructions to use the money for the child, or they set up a trust that names the child as beneficiary and an adult as trustee.
What happens if I name someone as a payable-on-death beneficiary and then change my will to name someone else?
The payable-on-death designation controls the account, not the will. The person named on the POD form gets the account. If you want to change who gets it, you must update the POD form at the bank, not just change your will. This is why it is important to keep your beneficiary designations in sync with your wishes.
If I add someone as a joint owner, can they take all the money while I am alive?
Yes. A joint owner has full access to the account and can withdraw all the money without your permission. If you want someone to help manage your finances but do not want to give them full control, a payable-on-death beneficiary is safer because they cannot access the money until you die.
Do I need a lawyer to set up a payable-on-death account?
No. Payable-on-death designations are free and you can set them up directly with your bank. You do not need a lawyer or any special paperwork beyond the bank's beneficiary form. If you have a complex estate or want to set up a trust, a lawyer can help, but for a straightforward POD account, the bank handles everything.
If I have multiple bank accounts, do I have to name a beneficiary on all of them?
No, but it is a good idea. Any account without a beneficiary designation will go through probate. If you have several accounts, naming a beneficiary on each one means all of them pass directly to your heirs without court involvement. You can name the same person on all accounts or different people on different accounts, depending on your wishes.