POD is a way to name a beneficiary on a bank account without going through probate
POD stands for "Payable on Death." It is a designation you can add to a bank account, savings account, or certificate of deposit (CD) that names who receives the money in that account when you die. The account passes directly to the person you name—called the POD beneficiary—outside of your will or estate. No court process is needed, and the transfer happens quickly, usually within days of your death.
The account works normally while you are alive. You have full control, can withdraw money, add to it, or change the beneficiary at any time. The POD beneficiary has no access to the account and no say in how you use it until after you die. At that point, they present a death certificate to the bank and claim the funds.
Key Takeaways
- POD lets you name a beneficiary on a bank account who receives the money directly when you die, without probate or a will.
- You keep full control of the account while alive and can change the beneficiary or withdraw all the money at any time.
- The POD beneficiary has no access to the account during your lifetime and no legal claim to the money until after your death.
- Most banks offer POD designations on checking accounts, savings accounts, and CDs, though the exact process and form name vary by institution.
- If you name a POD beneficiary and also leave the account to someone else in your will, the POD designation overrides the will.
How POD accounts work during your lifetime
A POD account is a regular bank account in every way while you are alive. You can deposit money, withdraw it, earn interest, and use it for daily banking. The bank does not restrict your access or require permission from the beneficiary you named. You can also change the beneficiary as many times as you want, and the bank will update their records with each change.
The POD designation is separate from your will. If your will says the account goes to your daughter but your POD form names your son, the POD designation wins. This is why it matters to keep track of which accounts have POD beneficiaries and which ones do not—they do not always go where your will says they should.
What happens to a POD account after you die
When you die, the account becomes part of your estate for a brief moment, but it does not stay there. The POD beneficiary contacts the bank with a death certificate and a form (usually called a "Claim for Funds" or "POD Beneficiary Claim"). The bank verifies the death certificate, confirms the beneficiary matches their records, and releases the funds directly to that person.
This process typically takes one to three weeks, depending on how quickly the beneficiary acts and how busy the bank is. The money does not go through probate court, which means it does not get held up in the legal system and does not become part of the public record. The beneficiary receives the full account balance, minus any outstanding fees or liens the bank has the right to collect.
POD versus other ways to pass money to someone
A POD account is one of several tools people use to pass money outside of probate. A joint account with right of survivorship is similar—when one owner dies, the other owner automatically owns the full account. The difference is that a joint owner can access and withdraw from the account while you are alive, whereas a POD beneficiary cannot. A joint account also means both owners are responsible for any debts tied to the account.
A trust is another option. You transfer the account into a trust, name a trustee, and say who receives the money when you die. A trust gives you more control over how and when the money is distributed—for example, you can say the beneficiary gets the money in installments rather than all at once. A POD account is simpler and costs nothing, but a trust is more flexible if your situation is complicated.
A will is the default if you do not use POD, joint ownership, or a trust. Money in an account with no POD designation goes through probate, which means a court oversees the transfer and it becomes public record. Probate takes months and costs money in court fees and attorney fees.
Which accounts can have a POD designation
Most banks allow POD designations on checking accounts, savings accounts, and certificates of deposit (CDs). Some banks also allow it on money market accounts. Credit unions typically offer POD as well. The rules vary slightly by bank, so it is worth asking your institution what accounts they support.
Some accounts cannot have a POD designation. Retirement accounts like IRAs and 401(k)s have their own beneficiary forms built in—you name a beneficiary when you open the account, and that person receives the money outside of probate automatically. You do not need to add a POD designation to a retirement account. Business accounts and accounts held in a trust usually cannot have a POD designation either.
How to set up or change a POD beneficiary
To add a POD beneficiary to an existing account, contact your bank and ask for the POD form. Different banks call it different things—some call it a "Payable on Death Designation," others call it a "Beneficiary Designation" or "Transfer on Death" (TOD). The form asks for your name, account number, and the full name and Social Security number of the person you want to name as beneficiary.
You sign the form in front of a bank employee (some banks require a notary, though most do not). The bank keeps the form on file. If you want to change the beneficiary later, you fill out a new form with the same process. The new form replaces the old one. Some banks let you make changes online, but most still require you to visit a branch or mail in a signed form.
When you open a new account, you can name a POD beneficiary at the same time. The bank will include the POD form as part of the account opening paperwork.
What happens if the POD beneficiary dies before you do
If your named beneficiary dies before you, the POD designation becomes void. The account does not automatically go to the beneficiary's children or spouse. Instead, the money becomes part of your estate and goes through probate, or it goes to whoever you name as a backup beneficiary if you named one.
Some banks allow you to name an alternate or contingent beneficiary—a second person who receives the money if the first beneficiary has already died. If you have a POD account and the beneficiary is elderly, seriously ill, or in a risky situation, consider naming a contingent beneficiary. If you do not have one and your beneficiary dies, you will need to update the POD form with a new name or decide what happens to the account.
Frequently Asked Questions
Can I name more than one POD beneficiary?
Most banks allow you to name multiple beneficiaries on a single account. If you do, the bank usually splits the account balance equally among them unless you specify different percentages on the form. Check with your bank about how they handle multiple beneficiaries, because the rules vary.
Does a POD account affect my taxes?
The POD beneficiary does not pay income tax on the money they receive—it is not considered income. However, if the account earned interest before your death, that interest is taxable income to your estate for the year you died. The beneficiary may also owe estate tax if your total estate is large enough, depending on your state and the federal estate tax rules at the time of your death.
Can creditors take money from a POD account after I die?
In most states, creditors can make a claim against a POD account if you owed them money when you died. The bank may hold the funds while the claim is resolved. However, some states protect POD accounts from creditors if the beneficiary is a spouse or child. The rules depend on your state and the type of debt.
What is the difference between POD and TOD?
TOD stands for "Transfer on Death." The terms are often used interchangeably, and both mean the same thing—money passes to a named person outside of probate when you die. Some banks use "POD," others use "TOD," and some use both. The function is identical.
Do I need a lawyer to set up a POD account?
No. Setting up a POD designation is free and requires only a form from your bank. You do not need a lawyer or a notary for most banks. If your situation is complex—for example, you have a large estate, multiple accounts, or family conflict—talking to an attorney about your overall plan makes sense, but the POD form itself is straightforward.