To add a beneficiary to a checking account, ask your bank for a Payable on Death (POD) designation form, fill in each beneficiary’s identifying details, and submit it. The process takes a few minutes, costs nothing, and keeps the account out of probate so your beneficiary can collect within days of your death instead of waiting months for a court. A handful of details are worth getting right before you sign.
What a POD Designation Actually Does
A Payable on Death designation is an instruction on file with your bank: when you die, pay this balance to the people I’ve listed. Some banks call it a Transfer on Death (TOD) account or a Totten Trust; the legal effect is the same. The money passes directly to whoever you name, without court involvement.1FDIC. Your Insured Deposits
Nothing changes about how you use the account while you’re alive. You keep full control to deposit, withdraw, or close it. Your beneficiary has no legal right to the funds and no access until after your death, when someone presents your death certificate to the bank.
How to Add the Beneficiary
Contact your bank and ask for the Beneficiary Designation Form or POD Addendum. Most banks provide it at a branch, and many now let you add or update beneficiaries through online banking. There is no fee.
The form asks for detailed identifying information about each person. Expect to provide the beneficiary’s full legal name, date of birth, Social Security number or tax ID, and current residential address.2Capital One. Designation of Payable on Death (POD) Beneficiary Form Get this right. A misspelled name or wrong Social Security number can delay the payout or force your beneficiary to produce extra documentation.
Submit the completed form to the bank. Keep a copy for your records, and note the date so you know which version is the most recent should you update it later.
Who You Can Name
You are not limited to naming individuals. Banks generally allow you to designate a spouse, other family member, friend, business, charity, estate, or trust as a POD beneficiary.3Bank of America. Beneficiaries FAQs One restriction: if the account already has co-owners, those co-owners cannot also be listed as POD beneficiaries, because they already own the funds.
Multiple Primary Beneficiaries
You can name more than one person. Unless you specify otherwise, most banks split the balance equally among all named primary beneficiaries. Four people means 25% each.3Bank of America. Beneficiaries FAQs Some banks let you assign unequal percentages on the form; equal division is the default if you don’t.
Contingent Beneficiaries
A contingent beneficiary receives the funds only if all your primary beneficiaries have already died. Without one, the money can fall back into your probate estate, which is exactly what the POD designation was supposed to avoid.
What happens when one of several primary beneficiaries dies before you depends on the bank’s rules and your state’s law. Many POD forms don’t address it clearly. In some cases, the deceased beneficiary’s share passes to the surviving beneficiaries; in others, it lapses into your estate. Ask the bank how their form handles it, and consider naming a contingent for each primary.
Naming a Minor
Banks will not release POD funds directly to someone under 18. If you name a minor, the money has to be held in a custodial account, typically under the Uniform Transfers to Minors Act (UTMA), until the minor reaches the age of majority.4Social Security Administration. SI 01120.205 Uniform Transfers to Minors Act An adult custodian manages the funds until then.5FINRA. Uniform Transfers to Minors Act and Uniform Grants to Minors Act Accounts If no custodian has been designated, a court may need to appoint one, which adds delay and legal cost. Check whether your bank’s POD form lets you name a custodian at the same time.
Things That Can Quietly Break Your Plan
Your Will Doesn’t Override the Form
The POD designation overrides your will. If your will says your checking account goes to your sister but your POD form names your brother, your brother gets the money. The bank follows the form on file, and no probate court will redirect those funds. The same is true for a revocable living trust: if you intended assets to flow through the trust but left a POD pointing elsewhere, the POD wins. Review beneficiary designations whenever you update your estate plan so everything points in the same direction.
Joint Accounts Delay the POD
If your checking account has a co-owner, the POD designation doesn’t activate until the last surviving owner dies. When you pass away, the co-owner inherits full control through the right of survivorship, and your POD beneficiary receives nothing at that point. The beneficiary only collects once all co-owners are gone.3Bank of America. Beneficiaries FAQs Parents who hold a joint account and name their children as POD beneficiaries sometimes assume the children collect when the first parent dies. They don’t.
Divorce Doesn’t Always Clean Up After You
Roughly half the states have laws that automatically revoke an ex-spouse as a beneficiary once a divorce is final. Not every state does, and relying on the law rather than updating the form is risky. If you divorce, file a new POD form immediately.
The FDIC Coverage Bonus
Naming POD beneficiaries can meaningfully increase your FDIC deposit insurance. A standard checking account is insured up to $250,000 per depositor. Add POD beneficiaries and coverage expands to $250,000 per beneficiary, up to a maximum of $1,250,000 with five or more beneficiaries.1FDIC. Your Insured Deposits
- 1 beneficiary: $250,000 coverage
- 2 beneficiaries: $500,000 coverage
- 3 beneficiaries: $750,000 coverage
- 4 beneficiaries: $1,000,000 coverage
- 5 or more beneficiaries: $1,250,000 maximum coverage
The per-beneficiary coverage applies whether you’ve assigned equal or unequal shares. Coverage caps at $1,250,000 per owner per bank.1FDIC. Your Insured Deposits For anyone holding large cash balances, this is one of the simplest ways to protect deposits above the standard limit.
Changing or Removing a Beneficiary
Submit a new designation form to your bank. There’s no limit on how often you can update, and the most recent form on file is the one that controls. To remove the designation entirely, ask for a revocation form. Some banks let you do both online.
Trigger a review after any of the usual life events: marriage, divorce, a birth, or a death in your named list.
What Happens When Your Beneficiary Comes to Collect
After your death, the beneficiary needs two things: a certified copy of the death certificate and a valid government-issued ID such as a driver’s license or passport. They bring both to the bank, the bank verifies the documents against the POD designation on file, and the funds are released.3Bank of America. Beneficiaries FAQs The bank calculates the balance as of the date of death and either issues a cashier’s check or deposits the funds into a new account in the beneficiary’s name. Most banks complete the transfer within a few days to a few weeks.
Taxes and Creditor Claims
Money received from a POD checking account is not taxable income to the beneficiary. Inheritances generally are not treated as income under federal tax law.
Federal estate tax is a separate question. POD balances are included in the account holder’s gross estate because the holder kept full ownership and control during life.6Office of the Law Revision Counsel. 26 US Code 2033 – Property in Which the Decedent Had an Interest In practice this matters only for very large estates. The federal estate tax exemption for 2026 is $15,000,000 per individual.7Internal Revenue Service. Whats New – Estate and Gift Tax A handful of states also impose their own inheritance tax on transfers to non-spouse beneficiaries, and POD accounts are not exempt.
A POD designation avoids probate, but it does not automatically shield the funds from the deceased’s creditors. If the estate can’t cover outstanding debts, creditors may pursue POD funds already transferred to a beneficiary. Rules vary significantly by state, and creditors generally face a higher burden when going after non-probate assets, but beneficiaries should not treat the money as untouchable simply because it bypassed probate.