POD stands for "Payable on Death" and names a person who inherits your account balance if you die
A POD designation is an instruction you give your bank: when you die, transfer whatever money is in that account directly to the person you named, without going through probate or your will. The bank does not split the money among your heirs or follow your will. It goes to the POD beneficiary you chose, period.
You set up a POD when you open the account or add it later. The bank will ask you to name a beneficiary and provide their Social Security number. While you are alive, the POD beneficiary has no claim to the money and cannot access it. The account is entirely yours to use, spend, or close. The POD only takes effect after you die and the bank is notified.
POD is also called a "transfer on death" or TOD account, depending on your bank's language. The result is the same: the money moves to your named person outside of probate.
Key Takeaways
- A POD beneficiary receives the full account balance when you die, but has no access or claim to the money while you are alive.
- The money transfers directly to the beneficiary and does not go through probate, which can save time and legal costs.
- You can change or remove a POD beneficiary at any time by contacting your bank, as long as you are alive and of sound mind.
- POD accounts are separate from your will, so if you name someone as POD beneficiary and someone different in your will, the POD takes priority for that account.
- Not all account types support POD; checking and savings accounts usually do, but money market accounts and CDs vary by bank.
How the money moves after you die
When you die, someone—usually a family member or the executor of your estate—tells the bank. The bank will ask for a death certificate. Once they have it, they verify that the POD beneficiary is still living and locate them if needed.
The bank then transfers the full balance to the beneficiary's account or issues a check. This usually takes one to three weeks, depending on how quickly the bank processes the paperwork. 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 other heirs unless you named multiple POD beneficiaries.
If you named more than one POD beneficiary, the bank will split the balance equally among them unless you told the bank otherwise. Some banks let you specify a percentage for each person; others split it 50/50 or three ways automatically.
POD versus a joint account with rights of survivorship
A joint account with rights of survivorship is different from POD, though both pass money outside probate. On a joint account, both people own the money right now and both can withdraw from it while alive. When one owner dies, the surviving owner automatically owns the full balance.
With POD, only you own the money while you are alive. The beneficiary has no claim to it and cannot touch it. This matters if you want someone to inherit your money but do not want them to access it before you die—for example, if you want to leave money to an adult child but do not want them to spend it while you are still living.
A joint account is simpler if you want someone to help manage your money now. POD is better if you want full control during your lifetime and only want the money to pass to someone after you are gone.
How to set up or change a POD beneficiary
If you are opening a new account, the bank will ask during the process whether you want to name a POD beneficiary. You provide their full name and Social Security number. Some banks let you do this online; others require you to fill out a form in person or by mail.
If you already have an account without a POD, contact your bank and ask to add one. You can usually do this by phone, in person, or online, depending on the bank. The bank will send you a form or walk you through the process on their website. You will need the beneficiary's full name and Social Security number.
You can change your POD beneficiary at any time while you are alive. straightforward contact the bank and request a change. The bank will cancel the old designation and record the new one. There is no fee for this, and you do not need the old beneficiary's permission.
What happens if your POD beneficiary dies before you do
If the person you named as POD beneficiary dies before you, the designation becomes void. The money does not automatically go to their heirs. Instead, when you die, the account will be treated as if there is no POD—the money becomes part of your estate and is distributed according to your will or your state's intestacy laws if you have no will.
This is why it is important to review your POD designations every few years, especially after major life changes. If someone dies, if you have a falling out with the beneficiary, or if your circumstances change, update the designation so your money goes where you actually want it to.
Some banks let you name a backup or contingent beneficiary—a second person who inherits if the first one dies before you. Ask your bank whether this option is available.
POD and taxes, debt, and creditors
Money in a POD account is not automatically protected from your debts or creditors. If you owe money when you die—credit card debt, medical bills, a mortgage—your estate may have to pay those debts before the POD money goes to your beneficiary. The exact rules depend on your state and the type of debt.
The beneficiary does not owe taxes on the money they inherit from a POD account. Inheritance is not taxable income at the federal level. However, if the account earned interest or dividends before you died, that income may be taxable to your estate.
If you are receiving means-tested benefits like Medicaid or Supplemental Security Income (SSI), a large POD account could affect your may be able to access. The money in the account counts toward your resource limit. Talk to a benefits counselor before naming a POD beneficiary if you receive these programs.
POD does not work the same way at every bank
Most banks offer POD on checking and savings accounts. Some banks call it "transfer on death" or use slightly different language. Credit unions often offer the same feature. However, not all account types support POD—some banks do not allow it on money market accounts, certificates of deposit (CDs), or investment accounts.
The process for setting up POD, the forms required, and the rules about multiple beneficiaries vary by bank. Before you assume your bank offers POD, contact them directly and ask. If they do not, you can explore other options like a living trust or a joint account, depending on what you are trying to accomplish.
Frequently Asked Questions
Can I name more than one POD beneficiary?
Yes. Most banks let you name multiple beneficiaries. Unless you specify otherwise, the bank will split the balance equally among them when you die. Some banks let you assign a percentage to each person; ask your bank what options they offer.
Does the POD beneficiary have to be a family member?
No. You can name anyone—a friend, a charity, a godchild, anyone. The bank does not restrict who you can name. You do need their full name and Social Security number (or tax ID if it is an organization).
What if I change my mind and want to remove the POD?
Contact your bank and ask to remove the POD designation. You can do this at any time. Once it is removed, the money in that account will be part of your estate when you die and will be distributed according to your will or state law.
Does POD override my will?
Yes. The POD designation takes priority for that specific account. If you name someone as POD beneficiary and name someone different in your will, the POD beneficiary gets the account balance. The rest of your estate goes according to your will.
Can someone else change my POD beneficiary?
No, not while you are alive. Only you can change it. After you die, the beneficiary cannot change it either—the money has already transferred. If you are concerned about someone pressuring you to change it, tell your bank and ask them to flag your account.