A payable-on-death account does not avoid probate—it bypasses it entirely for that account's money
A payable-on-death account (often called a POD account) is a bank account with a named beneficiary who receives the balance automatically when you die. The money does not go through your will or probate court. Instead, the bank transfers it directly to whoever you named on the POD form, usually within days of receiving a death certificate.
This is different from leaving money in your will. Money in your will must pass through probate—the court process that proves your will is valid, pays your debts, and distributes what remains. A POD account skips that step. The beneficiary you named gets the money without waiting for probate to finish, without court involvement, and without the account being counted as part of your probate estate.
The catch is that a POD account only protects that specific account. If you have other assets—a house, a car, investments, other bank accounts without POD designations—those still go through probate unless you have set them up differently.
Key Takeaways
- A POD account transfers money directly to your named beneficiary when you die, without going through probate court.
- You can name one or more beneficiaries on a POD form at your bank, and change them anytime while you are alive.
- The beneficiary has no access to the account while you are alive—you keep full control and can spend the money however you want.
- POD accounts work only for that specific account; other assets like real estate or vehicles need separate arrangements to avoid probate.
- Some states call this a "Totten trust" or use slightly different rules, so check with your bank about your state's exact process.
How to set up a POD account at your bank
Most banks offer POD designations on checking and savings accounts. When you open an account or anytime afterward, ask the bank for a POD form or beneficiary designation form. You will name the person or people who should receive the money after you die, provide their full legal name and Social Security number, and decide what percentage each gets if you name more than one.
The bank keeps this form on file. You do not need a lawyer, and there is no cost. You can change your POD beneficiary anytime by filling out a new form—the most recent one on file is the one that counts. Some banks let you do this online; others require you to visit a branch or mail in the form.
When you die, your executor or a family member gives the bank a death certificate. The bank verifies your identity in their records and transfers the balance to whoever you named. This usually takes a few days to a few weeks, depending on the bank.
What happens to a POD account during probate
The account itself does not enter probate. The money goes straight to the beneficiary you named, completely outside the probate process. Your executor does not control it, the court does not oversee it, and creditors cannot claim it (with rare exceptions in some states for certain debts).
However, if you named your estate as the POD beneficiary instead of a person, the money does go into probate. This is usually a mistake—people do it by accident when they are not sure who to name. If you have a POD account and have not named a specific person, check your form now and fix it.
If you name a minor as your POD beneficiary, the bank will not release the money to them directly. Instead, the money may be held in trust, or a court may need to appoint a guardian to manage it until the child turns 18 or 21, depending on your state. This is one situation where probate involvement can creep back in, so talk to a lawyer if you want to leave money to a child.
POD accounts versus other ways to avoid probate
POD accounts are one tool among several. A living trust lets you put multiple assets—bank accounts, real estate, investments—under one umbrella that passes to your beneficiaries without probate. A living trust costs more to set up (usually $500 to $2,000 with a lawyer) but handles everything in one document. A POD account is free and takes minutes but only covers that one account.
Joint ownership with right of survivorship is another option: if you own a bank account jointly with someone and one of you dies, the survivor automatically owns the whole account. This also avoids probate, but it gives the other person access and control while you are alive, which a POD account does not.
Some people use a combination. You might put your house in a living trust, keep your main checking account as a POD account, and own a car jointly with your spouse. Each tool handles a different piece of your estate.
State differences in POD account rules
Most states recognize POD accounts, but some call them by different names or have slightly different rules. In some states, the account is called a Totten trust. A few states limit how much money can pass through a POD account, or they require the bank to follow specific steps when you die.
Your bank knows your state's rules and will follow them. If you are moving to a different state or your beneficiary lives in a different state, ask your bank whether anything changes. In almost all cases, the answer is no—the account works the same way—but it is worth confirming.
What to tell your beneficiary about a POD account
Your POD beneficiary should know the account exists, which bank it is at, and roughly how much money is in it. They do not need to do anything while you are alive, but after you die, they will need to contact the bank with a death certificate to claim the money. If you do not tell them, they may never find out the account exists.
Some people keep a list of their accounts—including POD designations—in a safe place and tell a trusted family member where to find it. Others tell their executor directly. The goal is to make sure someone knows to contact the bank after you die.
Your beneficiary should also understand that a POD account is separate from your will. If your will says something different—for example, if your will says all your money should go to your spouse, but your POD account names your child—the POD account wins. The money goes to whoever you named on the POD form, not to whoever your will says should get it.
Common mistakes with POD accounts
The most common mistake is naming your estate as the beneficiary instead of a person. This defeats the whole purpose and sends the money through probate anyway. Check your form and make sure you named an actual person.
Another mistake is naming someone who dies before you do and never updating the form. If your POD beneficiary dies and you do not change the designation, the money may go to their estate or be split among their heirs, depending on your state. Update your POD form whenever your life changes—a divorce, a death in the family, a new child.
A third mistake is not telling anyone the account exists. If no one knows about it, the money may sit in the bank unclaimed. Most states have unclaimed property programs that eventually turn it over to the state, but it is much easier if your family knows to look for it.
Frequently Asked Questions
Can my POD beneficiary access the account while I am still alive?
No. A POD beneficiary has no rights to the account until you die. You have complete control—you can spend all the money, close the account, or change the beneficiary anytime. The beneficiary cannot touch it or even see the balance.
What if I name multiple beneficiaries on a POD account?
You can name as many as you want and decide what percentage each gets. When you die, the bank divides the money according to those percentages. If you name two people at 50% each and the account has $10,000, each gets $5,000. You can change these percentages anytime by updating your form.
Does a POD account protect money from creditors?
In most states, yes—creditors cannot claim money in a POD account after you die. The money goes directly to your beneficiary. A few states have exceptions for certain debts like taxes or medical bills, so check your state's rules if you are concerned.
What happens if my POD beneficiary dies before I do?
The money does not automatically go to their heirs. Instead, it either goes to a backup beneficiary you named (if you named one), or it becomes part of your probate estate and is distributed according to your will or your state's intestacy laws. Update your POD form if your beneficiary dies.
Is a POD account the same as a living trust?
No. A POD account is simpler and free but only covers that one account. A living trust is more complex and costs money to set up but can include multiple assets like real estate, vehicles, and investments all in one document. Many people use both.