Yes, you can name a beneficiary on most bank accounts, and it bypasses probate
You can name a beneficiary on most 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 shows ID.
Not all accounts support this. Money market accounts and certificates of deposit (CDs) usually do. Some banks call this feature "payable on death" (POD) or "transfer on death" (TOD). A few banks do not offer it at all, so you need to ask your bank directly whether your account type qualifies.
The main reason people use this is speed and simplicity. Your beneficiary can access the money within days or weeks instead of waiting months for probate to finish. The account also stays private—probate records are public, but a POD transfer is not.
Key Takeaways
- Most banks let you name a beneficiary on checking and savings accounts at no cost, and the money bypasses your will when you die.
- You can name one person or multiple people, and you can change or remove the beneficiary anytime while you are alive.
- The beneficiary has no access to the account while you are alive, even if they are named.
- If you name a beneficiary and also leave the account to someone else in your will, the beneficiary you named on the account wins.
- You will need to provide the bank with the beneficiary's full legal name, date of birth, and usually their Social Security number or tax ID.
How to set up a beneficiary on your account
Contact your bank and ask to add a payable on death (POD) designation or transfer on death (TOD) designation. Most banks have a form you fill out in person or online. You will need the beneficiary's full legal name, date of birth, and usually their Social Security number.
Some banks let you do this entirely online through your account settings. Others require you to visit a branch or call and speak to someone. A few still require a notarized form. Ask your bank which method they use and whether there is a fee—most do not charge.
Once the form is submitted and processed, the designation is active. You do not need to tell the beneficiary, and they cannot see the account or touch the money while you are alive. The bank keeps the designation on file and uses it only after you die.
What happens when you die
When you pass away, your family or executor contacts the bank with a death certificate. The bank verifies your death, confirms the beneficiary designation is still in place, and asks the beneficiary to provide ID and sign paperwork. The bank then transfers the full account balance to the beneficiary.
The timeline varies by bank. Some complete the transfer within a few days; others take two to four weeks. The beneficiary does not have to go to court, and the money does not become part of your estate. This is why POD accounts are useful if you want to leave money to someone without the delays of probate.
If you name multiple beneficiaries, the bank's rules determine how the money is split. Some banks divide it equally; others let you specify a percentage for each person. Ask your bank how they handle multiple beneficiaries before you set it up.
Naming multiple beneficiaries or changing your mind
You can name more than one beneficiary on the same account. The most common setup is to name two or three people and specify what percentage each one receives. You can also name a primary beneficiary and a backup (called a contingent beneficiary) who receives the money only if the primary beneficiary dies before you do.
You can change or remove a beneficiary anytime while you are alive. Contact your bank, fill out a new form, and the old designation is replaced. There is no waiting period and no penalty. This is useful if your circumstances change—a divorce, a new child, or a shift in who you want to leave money to.
If you do not name a beneficiary, or if all your named beneficiaries die before you do and you never named a contingent beneficiary, the account becomes part of your estate. That means it goes through probate and is distributed according to your will or your state's intestacy laws if you have no will.
What happens if you also have a will
If you name a beneficiary on your bank account and also leave that same account to someone else in your will, the beneficiary designation wins. The person you named on the account gets the money, and the will is ignored for that account.
This is important because many people do not realize they have a POD designation on an old account and then write a will leaving their money to someone different. The will does not override the account designation. If you want to change who gets the money, you have to update the account designation itself, not just your will.
If you have multiple accounts with different beneficiaries, make sure your designations match your overall plan. Write down which accounts have which beneficiaries and keep that list somewhere your family can find it after you die. Many people forget they named a beneficiary years ago and do not realize it is still active.
Beneficiary designations and taxes
Naming a beneficiary on a bank account does not create a tax bill for you or the beneficiary. The money is not considered a gift, and the beneficiary does not owe income tax on it. The account straightforward transfers to them.
However, if the account earns interest between the time you die and the time the beneficiary receives it, that interest may be taxable to the beneficiary. The amount is usually small, but it is worth knowing. The bank will issue a 1099 form if the interest is significant enough to report.
If your estate is large enough to owe federal estate tax (this applies only to very large estates—the threshold is over $13 million in 2024, though this changes yearly), the account value is still counted as part of your estate for tax purposes. The POD designation does not reduce your taxable estate; it only avoids probate.
Limits and things to watch for
You cannot name a beneficiary who is a minor without complications. If you name a child, the bank will not release the money to them directly when you die. Instead, the money may go to a court-appointed guardian or be held until the child reaches age 18 or 21, depending on your state. If you want to leave money to a child, talk to a lawyer about whether a trust or a custodial account is better.
If you name someone as a beneficiary and then that person commits a crime against you, or you get divorced, the designation does not automatically change. You have to update it yourself. Some states have laws that remove a spouse as a beneficiary after divorce, but not all do, and the rules vary. Do not assume the bank will do this for you.
If you are on Medicaid and have a large bank account, naming a beneficiary does not protect the money from Medicaid recovery. Medicaid can still try to recover costs from your estate after you die, and the POD account may be considered part of your estate depending on your state's rules. If you are on Medicaid or think you might be, talk to an elder law attorney before setting up a beneficiary.
Frequently Asked Questions
Can the beneficiary access the account while I am still alive?
No. The beneficiary has no rights to the account until you die. They cannot withdraw money, see the balance, or make changes. The designation only takes effect after your death.
What if I name a beneficiary and then get married or divorced?
The beneficiary designation does not change automatically. You stay in control of it. If you get divorced and want to remove your ex-spouse, you have to contact the bank and update the form yourself. Some states have laws that remove a spouse automatically, but you should not rely on that—update it yourself to be sure.
Can I name my estate as a beneficiary?
Technically yes, but it defeats the purpose. If you name your estate as the beneficiary, the account goes through probate just like it would if you had no beneficiary at all. Name a person instead if you want to avoid probate.
What if my beneficiary dies before I do?
If you named only one beneficiary and they die before you, the account becomes part of your estate and goes through probate. This is why naming a contingent (backup) beneficiary is useful—if your primary beneficiary dies, the money goes to the contingent beneficiary instead.
Do I need a lawyer to set up a beneficiary?
No. You can do it yourself by contacting your bank and filling out their form. It is free and takes a few minutes. You only need a lawyer if your situation is complicated—for example, if you want to leave money to a minor, or if you are on Medicaid, or if you have a large estate and want to plan for taxes.