To add a beneficiary to a checking account, ask your bank for a Payable on Death (POD) form, fill in each beneficiary’s full legal name, date of birth, Social Security number, and address, and submit it. There’s no fee, the process takes minutes, and the money will pass directly to the people you name without going through probate. A few details matter more than most people expect, especially how the form interacts with your will, how it expands your FDIC coverage, and what needs to happen after a divorce.
What a POD Designation Actually Does
A Payable on Death designation is an instruction on file with your bank: when you die, pay the balance in this account to the people I’ve listed. The funds pass directly to your named beneficiaries without court involvement, so no one has to wait months for an executor to release the money.1FDIC. Your Insured Deposits
While you’re alive, nothing changes. You keep full control to deposit, withdraw, or close the account. Your beneficiary has no legal right to the money and no access to the account until after your death, when someone presents your death certificate to the bank.
How to Set It Up
Contact your bank and ask for the Beneficiary Designation Form or POD Addendum. Most branches offer it in person, and many banks now let you add or update beneficiaries through online banking. There is no charge.
The form asks for detailed identifying information about each person you name. Expect to provide their 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 these details right. A misspelled name or wrong Social Security number can delay the payout or force your beneficiary to produce extra documentation.
You aren’t limited to naming individuals. Banks generally allow a spouse, other family member, friend, business, charity, estate, or trust as a POD beneficiary.3Bank of America. Beneficiaries FAQs One restriction to know: if the account already has co-owners, those co-owners cannot also be named as POD beneficiaries, because they already own the funds.
Naming More Than One Person
You can list several primary beneficiaries. Unless you specify otherwise, most banks split the balance equally among them, so four people each receive 25%.3Bank of America. Beneficiaries FAQs Some banks let you assign unequal percentages on the form. Equal division is the default when you don’t.
Contingent beneficiaries are your backup plan. A contingent receives the funds only if every primary beneficiary has died before you. Without a contingent, the money can fall back into your probate estate, which is exactly what the POD was meant to avoid.
What happens if one of several primaries dies before you do depends on your bank’s rules and your state’s law, and many POD forms don’t address it clearly. In some cases the deceased beneficiary’s share passes to the surviving primaries; in others it lapses into your estate. Ask your bank how their form handles this, and name contingents to close the gap.
Why the POD Form Beats Your Will
Your POD designation overrides your will. If your will leaves the checking account to your sister but the POD names your brother, the bank pays your brother. No probate judge will redirect those funds. This is one of the most common sources of unintentional disinheritance: people update their will and forget the beneficiary form, or the other way around.
The same is true for a revocable living trust. If you built a trust and intended everything to flow through it, a POD pointing somewhere else still wins. Whenever you update your estate plan, review your beneficiary designations so all the paperwork points in the same direction.
Updating After Life Changes
You can change your POD beneficiary at any time by submitting a new form. There’s no limit on how often you can update it, and the most recent form on file controls. To remove the designation entirely, ask the bank for a revocation form. Some banks handle both online.
Marriage, divorce, the birth of a child, or the death of a named beneficiary should all trigger a review. Divorce deserves special care. Roughly half the states automatically revoke an ex-spouse as a POD beneficiary once a divorce is final, but not every state does, and relying on the law rather than the paperwork is risky. File a new form yourself instead of assuming the old one has been voided.
What Your Power of Attorney Can and Can’t Do
If you become incapacitated, someone holding your power of attorney generally cannot change your POD beneficiaries unless the document specifically grants that authority. Most standard powers of attorney do not include it. If you want your agent to be able to update beneficiary designations on your behalf, that language has to be added when the document is drafted, and even then courts scrutinize such changes closely.
The FDIC Coverage Bonus
Naming beneficiaries can significantly increase your FDIC insurance. A standard checking account is insured up to $250,000 per depositor, but adding POD beneficiaries expands coverage to $250,000 per beneficiary, up to $1,250,000 when you name five or more.1FDIC. Your Insured Deposits
- 1 beneficiary: $250,000 covered
- 2 beneficiaries: $500,000 covered
- 3 beneficiaries: $750,000 covered
- 4 beneficiaries: $1,000,000 covered
- 5 or more beneficiaries: $1,250,000 maximum
Coverage per beneficiary applies whether you’ve split the account equally or unequally. You can name as many people as you want, but the cap is $1,250,000 per owner per bank.1FDIC. Your Insured Deposits For anyone with large cash balances, this is one of the simplest ways to protect deposits beyond the standard limit.
If the Account Has a Co-Owner
When a checking account has a co-owner, the POD designation doesn’t activate until the last surviving owner dies. When you pass, the surviving co-owner inherits full control through the right of survivorship, and your POD beneficiary receives nothing at that point. The beneficiary only collects after all co-owners are gone.3Bank of America. Beneficiaries FAQs
This surprises couples who set up a joint account, name their children as POD beneficiaries, and assume the children get something when the first parent dies. They don’t. The surviving spouse gets the whole balance, and only after both parents die do the children collect.
Naming a Minor
Banks will not release POD funds directly to anyone under 18. If your beneficiary is a minor, the money has to be held in a custodial account, typically under the Uniform Transfers to Minors Act, until the child reaches the age of majority.4Social Security Administration. SI 01120.205 Uniform Transfers to Minors Act An adult custodian manages the funds on the child’s behalf.5FINRA. Uniform Transfers to Minors Act and Uniform Grants to Minors Act Accounts
The complication is when no custodian has been designated. A court may then 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. If it doesn’t, address the custodianship in your estate plan so the money doesn’t sit in limbo.
How Your Beneficiary Actually Collects
After your death, the beneficiary needs two things to claim the funds: a certified copy of the death certificate and a valid government-issued ID such as a driver’s license or passport. The beneficiary brings both to the bank, staff verify the documents against the POD on file, and the funds are released.3Bank of America. Beneficiaries FAQs
The bank calculates the final balance as of the date of death and either issues a cashier’s check or opens a new account in the beneficiary’s name. Most banks complete the transfer within a few days to a few weeks when the paperwork is in order, far faster than probate.
If no one claims the funds, the account eventually becomes dormant. After a dormancy period of three to five years depending on the state, the bank is required to send the money to the state’s unclaimed property division. It isn’t lost, but recovering it from the state adds steps a timely claim would have avoided.
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, and a POD transfer is no exception.
Federal estate tax is a separate question. POD balances are included in the deceased owner’s gross estate for estate tax purposes because the owner had full control of the funds at death.6Office of the Law Revision Counsel. 26 US Code 2033 – Property in Which the Decedent Had an Interest In practice this only matters for very large estates: the federal exemption for 2026 is $15,000,000 per individual.7Internal Revenue Service. Whats New – Estate and Gift Tax A handful of states also impose inheritance tax on transfers to non-spouse beneficiaries, and POD accounts are not exempt, with rates running from roughly 1% to 16% depending on the state and the relationship.
Avoiding probate is not the same as blocking creditors. If your estate doesn’t have enough assets to cover outstanding debts, creditors may be able to pursue POD funds that have already been transferred, and the rules vary significantly by state. Beneficiaries should not assume the money is untouchable simply because it bypassed the probate estate.