What a bank beneficiary is and why you might add one
A beneficiary on a bank account is a person you name to receive the money in that account if you die. The account passes to them outside of your will or trust, which means it can reach them faster and without going through probate court. Banks call this a payable-on-death (POD) account or transfer-on-death (TOD) account, depending on the institution.
Adding a beneficiary takes about 15 minutes and costs nothing. You keep full control of the account while you're alive — the beneficiary cannot touch the money, and you can change or remove them at any time. The account works exactly as it does now; the beneficiary designation only matters after your death.
This is different from adding someone as a joint account holder. A joint holder can withdraw money right now. A beneficiary cannot. If you want someone to have access to your account while you're alive, you need a joint account instead.
Key Takeaways
- You can name a beneficiary on most checking and savings accounts by filling out a form at your bank — no lawyer or court involvement needed.
- The beneficiary receives the account balance after you die without the money going through probate, which usually saves time and money.
- You keep complete control of the account and can change or remove the beneficiary whenever you want.
- Different banks use different forms and may have different rules about how many beneficiaries you can name, so contact your bank directly to start.
- If you name a beneficiary and also leave the account to someone else in your will, the beneficiary designation overrides the will.
How to add a beneficiary at your bank
Start by calling your bank's customer service line or visiting a branch in person. Tell them you want to add a payable-on-death beneficiary to your account. They will give you a form — usually called a Beneficiary Designation Form or POD/TOD Form. Some banks let you fill this out online through your account portal; others require you to do it in person or by mail.
On the form, you will provide the beneficiary's full legal name, date of birth, and Social Security number. You may also need their address. If you want to name more than one beneficiary, the form will ask how you want the money split — equally, or in percentages you choose. Some banks limit you to one or two beneficiaries; others allow more.
Sign the form in front of a bank employee or notary, depending on your bank's rules. Some banks require a witness as well. Once the bank processes the form, the beneficiary designation takes effect immediately. You will receive a copy for your records.
What information you need before you start
Gather the following before you contact your bank: your account number, the full legal name of the person you want to name as beneficiary, their date of birth, and their Social Security number. If you are naming multiple beneficiaries, decide in advance what percentage of the account each should receive.
Make sure you have the beneficiary's legal name exactly as it appears on their government ID — not a nickname or shortened version. If the name is spelled wrong on the form, the bank may have trouble locating the beneficiary after your death, which can delay payment.
Changing or removing a beneficiary
You can change your beneficiary at any time by contacting your bank and requesting a new Beneficiary Designation Form. Fill it out with the new person's information, sign it, and submit it. The new designation replaces the old one. Keep a copy of the updated form.
To remove a beneficiary without naming a new one, ask your bank for a form to revoke the beneficiary designation. Once revoked, the account will pass through your will or to your estate if you have no will. Some banks call this "removing POD status" from the account.
What happens to the account after you die
When you die, your beneficiary (or their representative) contacts the bank with a death certificate and proof of identity. The bank verifies the information and transfers the account balance to the beneficiary. This usually takes one to four weeks, depending on the bank and whether the estate is being probated.
The beneficiary does not need a court order or lawyer to claim the money. This is one of the main advantages of a POD account — it bypasses probate entirely. However, if your estate owes debts or taxes, creditors may still have a claim against the account in some states, so check your state's rules if you are concerned about this.
Beneficiaries and taxes
Naming a beneficiary does not create a tax problem for you or the beneficiary. The account balance is not taxable income to the person who receives it. However, if the account earned interest or dividends before your death, that income may be subject to income tax on your final tax return.
If the account is very large, your estate may owe federal estate tax, but this only applies to estates worth more than a certain amount (which varies by year and is quite high). A lawyer or tax professional can tell you whether your situation involves estate tax concerns.
Beneficiaries at different types of banks
Most banks — including national chains like Bank of America, Wells Fargo, and Chase, as well as smaller regional banks and credit unions — allow you to name a POD beneficiary on checking and savings accounts. The process is the same everywhere: fill out a form, sign it, and submit it.
Money market accounts and certificates of deposit (CDs) can also have beneficiaries. Investment accounts (brokerage accounts, retirement accounts like IRAs) have their own beneficiary rules and forms, which work differently from bank accounts. If you have investments, contact your investment firm separately to name beneficiaries there.
Frequently Asked Questions
Can I name my minor child as a beneficiary?
Yes, but the money cannot go directly to the child. When you die, the bank will hold the funds until the child reaches the age of majority (usually 18), or you can name a custodian or guardian to manage the money for them. Ask your bank what options they offer for minor beneficiaries.
What if I name a beneficiary and also mention the account in my will?
The beneficiary designation overrides the will. The person you named on the bank form receives the account, regardless of what your will says. This is why it is important to keep your beneficiary designations up to date if your wishes change.
Can I name my estate as the beneficiary?
Yes, but this defeats the purpose of a POD account. If you name your estate as beneficiary, the account will go through probate just like any other asset. It is usually better to name a person directly or to leave the account with no beneficiary designation if you want it to pass through your will.
Do I need a lawyer to add a beneficiary?
No. Adding a beneficiary is a simple form that the bank handles. You do not need a lawyer, and it costs nothing. However, if you are creating a complex estate plan or have concerns about taxes or creditors, talking to a lawyer may be helpful.
What if the beneficiary dies before I do?
The account will pass to your estate and be distributed according to your will (or state law if you have no will). The beneficiary's heirs do not automatically receive the money. If you want to name a backup beneficiary in case your first choice dies before you, ask your bank if they allow contingent beneficiaries.