Yes. A payable on death bank account lets you name one or more people to receive the balance when you die, and the money passes to them directly without going through probate. The arrangement, usually called a POD designation, is a simple form you sign with your bank. While you’re alive, nothing about the account changes: you keep full control, the beneficiary has no access, and you can change your mind at any time.
What a POD Designation Actually Is
A POD designation is a contract between you and your bank. You name a person (or several) to receive whatever is in the account at your death. Until then, the beneficiary has no legal right to the money, cannot check the balance, cannot withdraw a cent, and does not need to be told they’ve been named. You can spend the account down to zero, close it, or swap in a different beneficiary without anyone’s permission.
You may see the same arrangement labeled an “In Trust For” account or a Totten trust. Functionally they’re the same thing: funds pass outside probate to the person on the form. POD designations are available on most standard deposit products, including checking accounts, savings accounts, money market accounts, and CDs.
Setting Up a Beneficiary
Most banks let you add a POD beneficiary through online banking, a mobile app, or in person at a branch. The bank needs enough information to identify the right person later:
- Full legal name as it appears on government-issued ID
- Date of birth
- Social Security number (required by some institutions, not all)
- Current mailing address
Accuracy matters. A misspelled name or wrong Social Security number can delay the payout or trigger a dispute after your death.
You can name a primary beneficiary and a contingent beneficiary who inherits only if the primary dies before you. You can also split the balance by percentage among several people. For example, 50 percent to a spouse and 25 percent each to two children.
Per Stirpes and Per Capita
Some banks let you choose how a deceased beneficiary’s share is handled. With a per stirpes designation, if one of your beneficiaries dies before you, that person’s share passes down to their children. With per capita, the remaining beneficiaries split the full balance instead. Per stirpes is often the better fit for parents who want grandchildren to inherit a deceased child’s portion, but not every bank offers it. Ask when you fill out the form.
Naming a Minor or a Trust
You can name a minor child, but the bank generally will not hand money directly to anyone under 18. If a minor is the beneficiary, the bank typically requires a court-appointed guardian or a custodian under the Uniform Transfers to Minors Act to receive the funds on the child’s behalf. The custodian manages the money until the child reaches the age set by state law, usually 18 or 21. To avoid court involvement, some account holders name an adult custodian on the POD form itself or set up a UTMA account in advance.
You can also name a revocable living trust as the beneficiary. That gives you more control over how the money is distributed—for example, holding funds for a child until age 25. If you name a trust, the bank will ask for the trust’s tax identification number instead of a Social Security number.
How a POD Account Interacts With Your Will
This is where people make the most expensive mistakes. A POD designation overrides your will. If your will leaves the account to one person but the POD form names someone else, the person on the POD form gets the money. The bank is legally obligated to follow the beneficiary designation because it is a separate contract, and the probate court has no authority over it. Updating your will without updating your bank forms is one of the most common ways accounts end up with the wrong person.
Joint accounts add another layer. When one co-owner of a joint account with right of survivorship dies, the surviving co-owner becomes the sole owner of the entire account, and the POD beneficiary gets nothing at that point. The POD designation only takes effect after the last surviving owner dies, and the surviving owner can change or remove the POD beneficiary at any time.1Wells Fargo. Estate Care Center
FDIC Coverage Grows With Each Beneficiary
Adding beneficiaries isn’t just about who inherits. It also increases your federal deposit insurance. For accounts with POD or trust designations, the FDIC insures up to $250,000 per beneficiary, with a maximum of $1,250,000 if you name five or more beneficiaries.2FDIC. Trust Accounts
- 1 beneficiary: $250,000
- 2 beneficiaries: $500,000
- 3 beneficiaries: $750,000
- 4 beneficiaries: $1,000,000
- 5 or more beneficiaries: $1,250,000
A single-owner account without a POD designation is insured for only $250,000 total at that institution. If you hold large balances at one bank, naming multiple beneficiaries is a straightforward way to protect more of the money. The FDIC combines all your trust-type deposits at the same bank—informal POD accounts, formal revocable trusts, and irrevocable trusts—when calculating the limit.2FDIC. Trust Accounts
Updating Beneficiaries After Life Changes
Changing beneficiaries usually means filling out a new designation form. Some banks accept an electronic signature online, others want a paper form in person or by mail, and a few still require notarization. Processing typically takes a few business days, and you should get a confirmation. Check your next statement to make sure the new names appear correctly.
Review your designations after any of these events:
- Marriage or remarriage: You may want to add a new spouse or adjust percentages.
- Divorce: Most states automatically revoke a POD designation naming a former spouse once the divorce is final, but not all do. Don’t rely on the automatic revocation—update the form yourself.
- Death of a beneficiary: If your primary beneficiary dies and you have no contingent beneficiary listed, the account may have to go through probate.
- Birth or adoption of a child: A new child won’t inherit anything unless you add them to the designation.
How the Beneficiary Collects the Money
Banks do not track down beneficiaries. If you’re named on a POD account, you have to contact the bank and start the claim yourself. You generally need two things:
- A certified death certificate from the vital records office in the state where the death occurred
- A government-issued photo ID such as a driver’s license or passport
For a POD account, that’s it. No probate documents, no court orders, no letters from an executor.1Wells Fargo. Estate Care Center You can usually start at a local branch, by mail with a notarized letter of instruction, or through the bank’s online portal. Once the documents are verified, the bank closes the deceased person’s account and either cuts you a check or transfers the balance into your own account. Straightforward claims often finish within a couple of weeks.
If the account holds a CD that hasn’t matured, many banks waive the early withdrawal penalty for a beneficiary claiming inherited funds. That isn’t legally required, so confirm the bank’s policy before withdrawing.
Taxes and Creditor Claims
Beneficiaries generally do not owe federal income tax on the balance they inherit from a POD bank account. The principal was already taxed as income when the original owner earned it. Any interest the account earns after the owner’s death is taxable to the beneficiary and should be reported on their return.
POD accounts skip probate, but they do not skip estate tax. The full balance is included in the deceased owner’s gross estate for federal estate tax purposes.3Internal Revenue Service. Survivors, Executors, and Administrators (Publication 559) For 2026, estates valued below $15,000,000 owe no federal estate tax, so this only matters for very large estates.4Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 State estate or inheritance taxes can kick in at much lower thresholds depending on where you live.
A common misconception is that POD funds are shielded from the deceased owner’s creditors. In many states, if the probate estate doesn’t have enough assets to cover the debts, creditors can pursue POD funds. The rules vary significantly by state. If the account holder had substantial debts, the beneficiary should talk to an attorney before spending the money.