What a POD designation does and why you might want one

A payable-on-death (POD) designation is an instruction you give your bank that says: when I die, transfer the money in this account directly to the person I name, without going through probate. You name a beneficiary on the account — a spouse, adult child, friend, or charity — and that person receives the balance automatically after you pass away. The bank handles the transfer, not a court.

POD designations exist because probate (the legal process of distributing a dead person's assets) is slow, expensive, and public. A POD account bypasses all three. The money reaches your beneficiary in weeks, not months or years. There are no court fees. And the transfer happens privately between you, your bank, and the person you name.

You keep full control of the account while you are alive. You can spend the money, change the beneficiary, or remove the POD designation entirely. The beneficiary has no claim to the account until you die.

Key Takeaways

  • You add a POD designation by contacting your bank directly — either in person at a branch, by phone, or through online banking if your bank offers it.
  • The bank will ask you to name a beneficiary and provide their full legal name and Social Security number or tax ID.
  • POD designations cost nothing and take effect immediately, but the beneficiary receives money only after your death and proof of it.
  • You can name multiple beneficiaries and decide how the money splits between them, or name a backup beneficiary in case your first choice dies before you do.
  • A POD designation overrides your will for that specific account, so make sure your wishes are clear if you have both.

Steps to add a POD beneficiary to an existing account

Start by contacting your bank. Most banks let you add or change a POD beneficiary through three routes: visit a branch in person, call the customer service number on the back of your debit card, or log into online banking and look for an account settings or beneficiary section. Not all banks offer the online option, so if you do not see it, call or visit.

When you contact the bank, tell them you want to add a payable-on-death beneficiary to your account. They will pull up your account and ask you for the beneficiary's full legal name (the name on their birth certificate or government ID), their date of birth, and their Social Security number or tax identification number. Have this information ready before you call or visit.

The bank will also ask whether you want to name a single beneficiary or split the money among multiple people. If you name two or more beneficiaries, you will specify the percentage each one receives — for example, 50% to your daughter and 50% to your son. Some banks also let you name a contingent beneficiary (a backup person who receives the money if your first choice dies before you do).

Once you provide the information, the bank will update your account records. There is no fee, and the change takes effect immediately. You will receive written confirmation, usually by mail or email. Keep this confirmation in a safe place — your beneficiary will need to show it to the bank after you die, along with a death certificate.

What information you need before you contact the bank

Gather these details about your beneficiary before you call or visit: their full legal name (exactly as it appears on their ID), their date of birth, and their Social Security number. If you are naming multiple beneficiaries, collect this information for each one.

You will also need to know which account you want to add the POD to — your checking account, savings account, or both. If you have multiple accounts at the same bank, you can add POD designations to any or all of them. Each account can have its own beneficiary or beneficiaries.

If you want to name a charity as beneficiary, ask the bank whether they accept nonprofits. Most do, but they may ask for the charity's tax ID number instead of a Social Security number. Call the charity's main office to get this number if you do not have it.

POD accounts at different types of banks and credit unions

Large national banks (Chase, Bank of America, Wells Fargo, Citibank) all offer POD designations and usually let you add them online, by phone, or in person. Credit unions also offer POD designations, though the process may vary slightly — some credit unions call it a "transfer-on-death" or "TOD" account instead. Call your credit union's member services line to ask how to set one up.

Online banks (Ally, Charles Schwab, Marcus) typically allow POD designations, but because they have no physical branches, you will need to do it by phone or through your online account. Check the bank's website or call their customer service number to find the exact process.

If you bank at a small local or community bank, ask whether they offer POD designations. Most do, but a few older institutions may not. If your bank does not offer them, you can open a new account at a bank that does and transfer money there.

How POD accounts work after you die

When you die, your beneficiary will need to contact the bank and provide two things: proof of your death (a certified death certificate, which the funeral home or county clerk can provide) and proof of their identity (a driver's license or passport). The bank will verify the information and transfer the account balance to the beneficiary.

The time this takes varies by bank, but most complete the transfer within two to four weeks. Some banks are faster. The beneficiary does not need a lawyer or court order — the POD designation is the legal authority the bank needs.

The money transferred through a POD account does not go through probate, which means it is not part of your estate for probate purposes. However, it may still be counted as part of your estate for tax purposes (such as federal estate tax, if your total estate is large enough). Talk to a tax professional or estate attorney if you have questions about how a POD account affects your taxes or estate plan.

Changing or removing a POD designation

You can change your beneficiary or remove the POD designation at any time while you are alive. Contact your bank using the same methods you used to add it — in person, by phone, or online. Tell them you want to change or remove the beneficiary, and they will update your account records.

There is no fee to make changes, and they take effect immediately. The old beneficiary has no claim to the account once you change it. If you remove the POD designation entirely, the account becomes a regular account with no named beneficiary, and the money will go through probate when you die.

If you move to a different bank, you will need to set up a new POD designation at the new bank. The old bank's POD designation does not transfer automatically.

POD accounts versus other ways to pass money to heirs

A POD account is one tool among several for moving money outside probate. A joint account (where two people own the account together) passes to the surviving owner automatically, but it gives that person full access to the money while you are alive — they can spend it or lose it in a lawsuit. A POD account keeps the beneficiary's hands off until you die.

A living trust is a legal document that names someone to manage your assets (including bank accounts) after you die. It costs more to set up than a POD account and requires you to transfer ownership of accounts into the trust's name. But a trust can cover multiple accounts and other assets in one document, and it gives you more control over how and when your beneficiary receives money.

A will is the most basic tool, but it requires probate. Money left through a will goes through the court system, which is slow and public. A POD account is simpler and faster for a single bank account.

Frequently Asked Questions

Can I name more than one beneficiary on a POD account?

Yes. You can name multiple beneficiaries and specify what percentage of the account each one receives. For example, you could name your two children as 50-50 beneficiaries, or name one child 60% and another 40%. The bank will split the balance according to your instructions after you die.

What happens to a POD account if the beneficiary dies before I do?

If you named only one beneficiary and they die before you, the account becomes a regular account with no POD designation. The money will go through probate when you die. This is why many people name a contingent beneficiary — a backup person who receives the money if the first choice dies first. Ask your bank if they allow contingent beneficiaries.

Does a POD account affect my will?

A POD designation overrides your will for that specific account. If your will says your money should go to your spouse but your POD says it goes to your child, the child receives the account balance. Make sure your POD designations match your overall wishes, or update your will to reflect them.

Can creditors or the IRS take money from a POD account after I die?

Yes, in some cases. If you owe taxes or have unpaid debts, creditors or the IRS may have a claim against your estate, which can include POD accounts. However, the rules vary by state and by the type of debt. Talk to an attorney if you have significant debts and are concerned about this.

Is there a cost to add a POD designation?

No. Banks do not charge a fee to add, change, or remove a POD beneficiary. The service is free.