POD means "Payable on Death" — a way to name who gets your account money when you die

A POD designation on a checking account is an instruction to the bank: when you die, transfer the money in this account directly to the person or people you named, without going through probate court. The bank holds the money in your name while you are alive. After you die, the person you named — called the POD beneficiary — can walk into the bank with a death certificate and claim the funds.

POD is not the same as naming someone on your will. A will goes through probate, which means a court oversees the distribution and it can take months or years. A POD account bypasses that process entirely. The money passes to your beneficiary outside of probate, which is why banks offer it — it is simpler for everyone.

You keep full control of the account while you are alive. The beneficiary has no access to the money, cannot see the balance, and cannot make withdrawals. You can spend all the money if you want to. You can also change or remove the POD beneficiary at any time by calling the bank or visiting in person.

Key Takeaways

  • POD stands for Payable on Death and lets you name who receives your checking account balance after you die without court involvement.
  • You retain complete control of the account and the money while alive, and the beneficiary cannot access it until you die.
  • The beneficiary claims the funds by presenting a death certificate to the bank, a process that typically takes days or weeks rather than months.
  • You can change or remove the POD beneficiary at any time, and the designation does not affect your will or other estate plans.
  • POD is available at most banks and credit unions, though some institutions may call it by a different name such as "Transfer on Death" (TOD).

How to set up a POD designation on your checking account

When you open a checking account, the bank will ask if you want to name a POD beneficiary. You can say yes or no at that time. If you already have an account and want to add a POD designation now, call your bank's customer service line or visit a branch in person. You will need to provide the beneficiary's full legal name and, at most banks, their Social Security number or date of birth.

Some banks let you name more than one beneficiary. If you do, you will specify how the money is split — for example, 50% to your spouse and 50% to your child. If you do not specify percentages, the bank's default is usually to split it equally among all named beneficiaries. Ask your bank what their rule is before you finalize the form.

The bank will give you a form to sign. Keep a copy for your records. There is no fee to add or change a POD designation. The process takes a few minutes and requires no court approval or legal paperwork beyond what the bank provides.

What happens to the account after you die

When you die, the person you named as POD beneficiary can contact the bank and request the funds. They will need to provide a certified copy of your death certificate. Some banks also ask for a copy of the beneficiary's ID and may require them to fill out a claim form.

The bank will verify the death certificate and then transfer the money to the beneficiary. This process usually takes between three and ten business days, though some banks are faster. The beneficiary does not need a lawyer, does not need to go to court, and does not need permission from anyone else — as long as they have the death certificate, the money is theirs.

If you named multiple beneficiaries, each one receives their share based on the percentages you set. If you did not set percentages, they split the account equally and each beneficiary must claim their own share.

POD versus other ways to pass money to someone

A POD account is one of several tools people use to avoid probate. Another common one is a joint account, where two people own the account together and either one can withdraw money while both are alive. When one owner dies, the surviving owner automatically owns the whole account. Joint accounts are simpler in some ways but riskier — the other owner can spend the money whenever they want, and creditors of the other owner can sometimes claim money from the account.

A living trust is a more complex tool that lets you transfer property, bank accounts, and other assets into a trust during your lifetime. When you die, a person you named (called a trustee) distributes the assets according to your instructions. Trusts cost more to set up and require more paperwork, but they give you more control over how money is distributed — for example, you can say the money goes to your child only when they turn 25, or that it goes to your grandchild if your child dies first.

A will is a legal document that says who gets your money and property after you die. Unlike POD, joint accounts, and trusts, a will must go through probate court. Probate is public, takes time, and costs money in court fees and attorney fees. Most people use a combination of these tools — for example, a will for property and a POD account for checking money.

POD beneficiaries and taxes

Money that passes to a POD beneficiary is not subject to federal income tax. The beneficiary does not owe tax on the money they receive, and the bank does not issue a 1099 form for it. This is different from money left in a will or trust, which also is not taxed, but the rules are the same across all these methods.

However, if the account earns interest before you die, that interest is taxed as income to you in the year it is earned — just as it would be on any checking account. The beneficiary does not owe tax on the interest, only you do while you are alive.

POD accounts may affect Medicaid or other means-tested benefits. If you are receiving Medicaid and you name someone as a POD beneficiary, Medicaid may count the account as an asset you own, which could disqualify you from benefits. Talk to a Medicaid caseworker or an elder law attorney before setting up a POD if you receive government benefits.

What to do if the POD beneficiary dies before you

If the person you named as POD beneficiary dies before you do, the designation becomes invalid. The money in the account will not go to that person's heirs or estate — it will be treated as part of your estate when you die, which means it will go through probate or be distributed according to your will.

For this reason, it is a good idea to review your POD designation every few years, especially after major life changes like a death in the family, a divorce, or the birth of a child. If your beneficiary dies, call your bank and update the designation right away. You can name a different person, name multiple people, or remove the POD designation entirely.

POD accounts at different banks and credit unions

Most banks and credit unions offer POD designations on checking accounts. Some use the term "Payable on Death," while others call it "Transfer on Death" (TOD) or "In Trust For" (ITF). The function is the same — the money goes to the person you named when you die, outside of probate.

A few banks do not offer POD on checking accounts, though this is rare. If your bank does not offer it, you can ask whether they offer it on savings accounts instead, or whether they have another tool that does the same thing. You can also consider moving your account to a bank that does offer POD if it matters to you.

Credit unions typically offer POD on both checking and savings accounts. The process is the same as at a bank — you name the beneficiary when you open the account or by visiting a branch later.

Frequently Asked Questions

Can I name my minor child as a POD beneficiary?

Yes, but the bank will not release the money to a minor. When you die, the money will be held by the bank until the child turns 18 or 21, depending on your state's law. Some banks require the parent or guardian to open a custodial account to hold the money. Ask your bank what their policy is before you name a minor.

What if I have a POD account and also a will that says the money goes to someone else?

The POD designation overrides the will. The money goes to the POD beneficiary, not to whoever the will says should get it. This is why it is important to make sure your POD designation matches your overall estate plan.

Can a creditor take money from a POD account after I die?

Generally no. Once the money passes to the POD beneficiary, it belongs to them and creditors cannot claim it. However, some states have exceptions if the estate does not have enough money to pay debts. Talk to an attorney in your state if you are concerned about this.

Do I need a lawyer to set up a POD account?

No. The bank handles everything. You just fill out a form and name the beneficiary. A lawyer is not required, though you may want to talk to one if you have a complex estate or if you are trying to coordinate the POD with a will or trust.

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

Yes, at any time. Call your bank or visit a branch and ask to update the POD designation. The bank will give you a new form to sign. There is no fee and no waiting period.