A POD account lets you name someone to inherit the money in it when you die, without going through probate court

POD stands for "Payable on Death." It is a way to put your bank account in someone else's name automatically after you pass away. You set it up while you are alive by filling out a form at your bank. When you die, the money goes directly to the person you named — called the beneficiary — without the need for a will or court involvement.

The key difference from a regular account is timing and process. In a regular account, your money becomes part of your estate, which means it goes through probate — a court process that can take months or years and costs money in legal fees. With a POD account, the transfer happens outside probate. The beneficiary can usually claim the money within days or weeks of providing a death certificate to the bank.

You keep full control of the account while you are alive. You can spend the money, add to it, or change the beneficiary whenever you want. The POD designation does not affect how you use the account day to day.

Key Takeaways

  • A POD account transfers money directly to a named person after you die, skipping probate court entirely.
  • You control the account completely while alive — you can spend the money, change the beneficiary, or remove the POD designation at any time.
  • The beneficiary you name has no claim to the money while you are living, even if they are a family member.
  • Setting up a POD costs nothing and takes just a few minutes at your bank; you fill out a form with the beneficiary's name and Social Security number.
  • POD accounts work for checking, savings, and money market accounts, but not for investment accounts like stocks or mutual funds.

How to set up a POD account at your bank

Start by asking your bank whether they offer POD accounts — most do, but not all. Call your branch or visit in person and ask for a Payable on Death form or POD designation form. Some banks call it a Transfer on Death or TOD form, which means the same thing.

On the form, you will provide the beneficiary's full legal name, date of birth, and Social Security number. You can name one person or multiple people. If you name more than one, the form will ask how the money splits — equally, or in percentages you choose. You will sign the form in front of a bank employee, who will also sign it. The bank keeps a copy and gives you one.

There is no fee to set up a POD account, and it takes about five minutes. You do not need a lawyer or any special paperwork beyond what the bank provides.

What happens to the money after you die

When you pass away, the beneficiary needs to contact the bank and provide a certified copy of your death certificate. The bank will verify the death certificate and confirm that the person claiming the money is the named beneficiary. This usually takes a few days to a couple of weeks.

Once the bank confirms everything, the money is transferred to the beneficiary's account or given to them in whatever form they request — a check, a wire transfer, or cash. The beneficiary does not have to go to court, does not have to wait for probate to finish, and does not have to share the money with your other heirs unless you named them as co-beneficiaries.

If you name multiple beneficiaries and do not specify how the money splits, most banks divide it equally among them. If you want unequal splits — for example, 60 percent to one child and 40 percent to another — write those percentages on the form when you set it up.

POD accounts versus wills and trusts

A will is a legal document that says who gets your money and property after you die. But money in a will goes through probate, which means a court oversees the process. Probate can take six months to two years depending on your state and how complicated your estate is. It also costs money — court fees, lawyer fees, and fees to the person managing the estate.

A POD account skips probate entirely. The money goes straight to the beneficiary without court involvement. This is faster and cheaper, but it only works for bank accounts. If you have a house, a car, or investments, you still need a will or trust to handle those.

A trust is another tool that avoids probate. You put your assets into a trust while you are alive, and name someone to manage them after you die. Trusts are more complex and usually cost money to set up with a lawyer, but they can handle all your assets — bank accounts, property, investments — in one document. A POD account is simpler and free, but it only works for one bank account at a time.

Many people use POD accounts for some accounts and a will or trust for everything else. For example, you might use a POD account for your savings account and a will for your house.

Who can be a beneficiary on a POD account

You can name almost anyone as a beneficiary — a spouse, child, grandchild, friend, or charity. The person does not have to be related to you. You do not need their permission to name them, and they do not have to sign anything.

The beneficiary has no legal claim to the money while you are alive. They cannot access it, spend it, or force you to give it to them. You can change the beneficiary or remove the POD designation whenever you want, just by filling out a new form at the bank.

If you name someone and later change your mind — because of a divorce, a family disagreement, or any other reason — you can update the form at no cost. The most recent form you signed is the one the bank will follow after you die.

What types of accounts can have a POD designation

POD works on deposit accounts — checking accounts, savings accounts, and money market accounts. These are accounts where you deposit money and the bank holds it for you.

POD does not work on investment accounts like brokerage accounts, stock accounts, or mutual fund accounts. Those accounts have their own transfer methods. For investments, you typically name a beneficiary directly with the investment company, using a form called a beneficiary designation or Transfer on Death registration.

Some banks offer POD on certificates of deposit (CDs), which are savings products where you agree to leave money in the account for a set time in exchange for a higher interest rate. Ask your bank which of their accounts support POD.

Things to know before you set up a POD account

POD accounts are straightforward, but there are a few details worth understanding. First, the money in a POD account may still be counted as part of your estate for tax purposes in some situations, depending on your state and the size of your estate. If you have a very large estate, talk to a tax professional or lawyer about whether a POD account is the best choice.

Second, if you are married and live in a community property state — Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin — the rules for POD accounts are different. In those states, money you earn during marriage is considered jointly owned, which can affect how a POD account works. Ask your bank or a lawyer about the rules in your state.

Third, if you receive means-tested benefits like Medicaid or Supplemental Security Income (SSI), a POD account does not protect the money from being counted as an asset. The money is still yours while you are alive, so it counts toward benefit limits. This is different from a trust, which can sometimes protect assets from benefit calculations. If you receive these benefits, talk to a benefits counselor before setting up a POD account.

Frequently Asked Questions

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

Yes. You can name multiple people and decide how the money splits between them. If you do not specify percentages, most banks divide the money equally. Make sure the form clearly shows the split you want — for example, "50% to John Smith, 50% to Jane Smith" — so there is no confusion after you die.

What happens if the beneficiary dies before I do?

The money goes back into your estate and is handled according to your will or the laws of your state. This is why it is important to update your POD designation if your beneficiary dies or if your life circumstances change. Check your POD form every few years to make sure it still reflects who you want to inherit the money.

Can my beneficiary access the money while I am still alive?

No. The beneficiary has no claim to the money until you die. You have complete control of the account while you are living. You can spend all the money, close the account, or change the beneficiary without the current beneficiary's permission or knowledge.

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

No. POD accounts are free and take just a few minutes to set up at your bank. You fill out a form, sign it, and you are done. You only need a lawyer if you have a complicated estate or if you want to set up a trust instead.

Is a POD account the same as a joint account?

No. In a joint account, the other person can access and spend the money while you are alive. In a POD account, only you can access the money while you are alive. The beneficiary only gets the money after you die. POD is simpler and gives you more control.