Yes, you can name a beneficiary on most bank accounts, and it bypasses probate when you die
Most banks let you name a payable-on-death (POD) beneficiary on checking and savings accounts. When you die, the money in that account goes directly to the person you named—it does not go through your will or probate court. The bank handles the transfer once you provide a death certificate and the beneficiary asks for it.
Not all account types support beneficiaries. Money market accounts usually do. Certificates of deposit (CDs) almost always do. Joint accounts work differently—the surviving joint owner typically gets the money automatically, regardless of what your will says. Some banks also offer transfer-on-death (TOD) accounts, which work the same way as POD but may be called by a different name.
The beneficiary has no access to the account while you are alive. They cannot withdraw money, see the balance, or make decisions about it. The account is entirely yours until you die.
Key Takeaways
- You can name a payable-on-death beneficiary on most checking and savings accounts at no cost, and the money bypasses probate when you die.
- The beneficiary cannot touch the account while you are alive and has no legal claim to it until you pass away.
- You can change or remove the beneficiary at any time by contacting your bank, and you do not need the beneficiary's permission to do so.
- If you name a beneficiary and also leave the account to someone else in your will, the beneficiary designation wins—the will does not override it.
- Joint account owners typically inherit automatically and may not need a separate beneficiary designation, depending on how the account is titled.
How to name a beneficiary at your bank
Contact your bank and ask to add a payable-on-death beneficiary. Most banks handle this over the phone, by mail, or through their online account settings. You will need to provide the beneficiary's full legal name and usually their Social Security number or date of birth so the bank can identify them correctly.
Some banks ask you to fill out a form; others update the designation in their system during a call. There is no cost. The bank will confirm the change in writing—keep that confirmation with your important documents. If your bank does not offer POD accounts, ask whether they offer transfer-on-death or another similar option.
You can name one person or multiple people. If you name more than one, specify how the money splits—equally, or in percentages you choose. If you do not specify, most banks split it equally among all beneficiaries you named.
What happens when you die
When you pass away, the beneficiary (or their family, if the beneficiary has also died) contacts the bank with a death certificate. The bank verifies the death and transfers the account balance to the beneficiary. This usually takes one to three weeks, though it can be faster or slower depending on the bank and whether there are complications.
The beneficiary does not need a lawyer or court order. They do not have to go through probate. The bank handles it directly. If the beneficiary has died before you, the money typically goes to your estate instead, which means it will be handled according to your will or state law.
The account itself closes once the balance is transferred. The beneficiary cannot keep it open or add their own money to it.
Changing or removing a beneficiary
You can change the beneficiary at any time while you are alive. Contact your bank, provide the new beneficiary's information, and the old designation is replaced. You do not need permission from the current beneficiary, and they do not need to know you changed it. The bank will send you written confirmation.
If you want to remove a beneficiary entirely without naming a replacement, you can do that too. The account will then pass through your will or to your estate according to state law. Ask your bank what their process is for removing a designation.
Beneficiary designations versus your will
If you name a beneficiary on your bank account and also leave that account to someone else in your will, the beneficiary designation wins. The will does not override it. This is true even if your will is newer or more detailed. The bank follows the beneficiary form you signed, not your will.
This can create problems if your circumstances change—you divorce, remarry, or have a falling out with the person you named. That is why it is important to review your beneficiary designations whenever your life changes. Many people forget they named an ex-spouse years ago and never updated it.
Joint accounts and beneficiaries
If your account is a joint account with rights of survivorship, the surviving joint owner inherits the money automatically when you die. You may not need a separate beneficiary designation. However, some banks let you name a beneficiary on a joint account anyway—in that case, the beneficiary typically only receives money if both joint owners have died.
If your joint account does not have rights of survivorship, it is treated differently. Ask your bank how your specific account is set up and whether adding a beneficiary makes sense for your situation.
Taxes and the beneficiary
The beneficiary does not pay income tax on the money they inherit from your bank account. It is not considered income to them. However, if the account earned interest before you died, that interest may be subject to tax on your final tax return—your executor or family handles that, not the beneficiary.
For very large estates, federal estate tax may apply, but this depends on the total value of everything you own, not just the bank account. Most people do not owe federal estate tax. State estate or inheritance taxes vary by where you live and where the beneficiary lives.
Frequently Asked Questions
Can I name my minor child as a beneficiary?
Yes, but the bank will not release the money to a child directly. When you die, a court may need to appoint a guardian to manage the money until the child turns 18 or 21, depending on your state. You can avoid this by naming an adult (like a spouse or parent) as beneficiary and specifying in your will that they hold the money in trust for your child.
What if the beneficiary dies before I do?
The money goes to your estate and is handled according to your will or state law. Some banks let you name a "contingent beneficiary"—a backup person who inherits if the first beneficiary has died. Ask your bank if they offer this option.
Does naming a beneficiary affect my credit or my account fees?
No. Adding a beneficiary does not change your credit score, does not cost money, and does not affect how your account works while you are alive. It is purely a designation for after you die.
Can I name a charity or trust as a beneficiary?
Some banks allow it, but policies vary. Call your bank and ask. If they do not support it directly, you can name a person as beneficiary and specify in your will that they donate the money to the charity you choose.
What if I have accounts at multiple banks?
You can name beneficiaries on each account separately. Each bank maintains its own beneficiary form. Make sure you have a list of all your accounts and who you named on each one, and keep that list with your important documents so your family can find them after you die.