POD stands for "Payable on Death," a way to name who gets your money if you die

A POD designation on a checking account is an instruction you give your bank about what happens to the money in that account after you pass away. Instead of your account going through probate (the legal process that can take months or years to settle an estate), the money goes directly to the person or people you name. The bank handles the transfer, not the court.

You set up a POD by filling out a form at your bank — usually called a "Payable on Death" or "Transfer on Death" form. You name one or more beneficiaries (the people who will receive the money) and provide their Social Security numbers. The account stays entirely yours while you're alive. Your beneficiaries have no access to it, and you can change or remove them anytime without their permission.

POD is different from making someone a joint owner of the account. A joint owner can withdraw money right now. A POD beneficiary cannot touch the account until after you die and they present a death certificate to the bank.

Key Takeaways

  • POD means the money in your account passes directly to the person you name, bypassing probate court.
  • You keep full control of the account while alive — beneficiaries cannot access it or make changes.
  • You can name one beneficiary or split the money among several, and you can change your choices anytime.
  • The bank handles the transfer after you provide a death certificate; no lawyer or court involvement is needed.
  • POD works on checking accounts, savings accounts, and money market accounts, but not on credit cards or loans.

How POD works after you die

When you pass away, your beneficiary contacts the bank with a death certificate and proof of their identity. The bank verifies the information and transfers the money directly to them. This usually takes a few days to a couple of weeks, depending on the bank's process. No court order is required.

If you name multiple beneficiaries, the money is split equally among them unless you specify different amounts on the form. If a beneficiary dies before you do, that person's share goes to the remaining beneficiaries you named, or back into your estate if you named only one person who has already passed away.

POD versus joint account ownership

A joint account with "rights of survivorship" also passes money to another person after death, but the difference matters. On a joint account, both owners can withdraw money right now. On a POD account, only you can withdraw money while you're alive.

Joint accounts can also create problems if you're trying to protect money from creditors or if you want to keep finances separate. A joint owner's creditors might be able to go after the joint account. A POD beneficiary's creditors cannot touch the account before you die.

Which accounts can have POD

Most banks allow POD on checking accounts, savings accounts, and money market accounts. You cannot use POD on credit cards, loans, or investment accounts like brokerage accounts (those use a different process called "transfer on death" registration, which works similarly but has different rules).

Ask your bank whether they offer POD. Some smaller banks or credit unions may call it by a different name, such as "Transfer on Death" or "In Trust For," but the concept is the same. The form is free, and there is no fee to set it up or change it.

Why people use POD

POD avoids probate, which can be slow and expensive. Probate court must verify a will, identify all heirs, pay debts and taxes, and distribute what's left — a process that can take six months to two years depending on the state and the complexity of the estate. During that time, beneficiaries cannot access the money.

POD also keeps the transfer private. Probate is public record; anyone can look up what someone owned and who inherited it. With POD, only the bank, you, and your beneficiary know about the account.

For people without a will or with a small estate, POD is a straightforward way to make sure money reaches the people they want to have it, without legal fees or court delays.

What happens if you don't name a POD beneficiary

If you die without naming a POD beneficiary, the account becomes part of your estate. It goes through probate, and a court decides who gets the money based on your state's inheritance laws (usually a spouse first, then children, then parents, then siblings). This takes longer and costs more than POD.

You can add a POD beneficiary to an existing account anytime. If you already have one named and want to change it, you fill out a new form — the most recent form is the one the bank will follow.

POD and taxes

POD does not avoid taxes. If your estate is large enough to owe federal estate tax (the threshold is very high — over $13 million for most people in 2024, though this changes by year), the POD account is still counted as part of your taxable estate. Your beneficiary will not owe income tax on the money they receive, but your estate might owe estate tax if it's large enough.

State inheritance taxes vary. Some states have them, some don't. The POD account is treated the same way as other assets for state tax purposes.

Frequently Asked Questions

Can I name my minor child as a POD beneficiary?

Yes, but the money cannot go directly to a child under 18. The bank will hold it or require you to name a guardian or custodian who will manage it until the child reaches the age of majority (usually 18 or 21, depending on your state). Talk to your bank about how they handle this.

What if I name someone as POD and then get divorced?

The POD designation stays in place unless you change it. Your ex-spouse will still receive the money unless you fill out a new form removing them. After a divorce, review all your POD and beneficiary designations and update them if needed.

Can the bank refuse to pay a POD beneficiary?

The bank will pay if the beneficiary provides a valid death certificate and proof of identity. The only exception is if there's a legal hold on the account (for example, a court order related to a lawsuit or unpaid taxes). In that case, the bank must follow the court order.

Do I need a lawyer to set up POD?

No. POD is a straightforward form you fill out at your bank. It's free and takes a few minutes. You do not need a lawyer, though you may want to talk to one if you're planning your entire estate.

Can I change my POD beneficiary after I set it up?

Yes, anytime. You fill out a new form at your bank naming different beneficiaries. The new form replaces the old one. You do not need permission from the current beneficiary to make this change.