Payable on Death Accounts: How They Work and How to Claim One

A payable on death (POD) account is a bank account that passes directly to a person you name when you die, without going through probate. You keep full control while you're alive, and the beneficiary claims the money with a death certificate and ID. The account also avoids your will for that money, but it doesn't protect the funds from every claim.

What is a payable on death account?

A POD account is an ordinary checking, savings or certificate of deposit account with a beneficiary added. Minnesota's statute defines it as an account "payable on request to one or more parties and on the death of the parties to one or more P.O.D. payees." The FDIC calls it an informal revocable trust and notes that banks also call it an in-trust-for or Totten trust account.

While you're alive:

• You can deposit, withdraw, spend and close the account.
• You can change or remove the beneficiary at any time.
• The beneficiary has no rights to the money. In Minnesota, a POD payee becomes a party to the account only after the account becomes payable because the payee outlived the original party.

The same idea for investments is called a transfer on death (TOD) registration, and for real estate it is a transfer on death deed in states that allow it.

How does a POD account avoid probate?

Probate is the court process for settling the assets a person owned in their own name. A POD account doesn't pass under your will. It passes by the bank's contract with you, so the bank pays the beneficiary directly once it confirms the death. That's why a POD account can be a faster source of cash for funeral costs than waiting for an estate to open, although the beneficiary still has to go through the bank's claim process.

For the wider picture of ways to keep assets out of probate, see our guide to bypassing probate. The same rule that makes POD accounts useful also creates a trap: they override your will for that account, so a mismatch can leave someone out. Our beneficiary update checklist covers how to keep every designation in line.

POD, TOD, joint accounts and trusts compared

Our guide on joint ownership and death explains survivorship, and living trust vs will compares the bigger options.

How do you set up a POD account?

1. Ask the bank for its POD or beneficiary form. Many banks let you add a beneficiary to an existing account. Some can do it online.
2. Decide who and how much. Use full legal names. If you name more than one person, say how to divide the account. Under Minnesota law, payees who survive share equally unless the account says otherwise.
3. Ask about a backup. Some banks let you name a contingent beneficiary. If they don't, the share of a beneficiary who dies first may fall back to your estate.
4. Avoid naming a minor. A bank usually won't pay a large sum to a child directly. A custodian under your state's Uniform Transfers to Minors Act, or a trust, is the usual fix. Ask an attorney if you have a young beneficiary.
5. Get a copy or confirmation and keep a list of which accounts have which beneficiaries.
6. Review after life changes, such as marriage, divorce, a birth or a death.

Is a POD account covered by FDIC insurance?

Yes, if the bank is FDIC-insured. POD accounts fall under the FDIC's trust account rules. Coverage is $250,000 times the number of beneficiaries the owner names, up to a maximum of five, which comes to $1,250,000 per owner at one bank (12 CFR 330.10). The FDIC gives this example: one owner naming three beneficiaries can be insured up to $750,000. Your other accounts at the same bank may count in other ownership categories.

After an owner dies, the FDIC says the death does not change insurance coverage for six months unless the account is restructured. Use the FDIC's online Electronic Deposit Insurance Estimator (EDIE) if you have large balances.

How to claim a POD account as the beneficiary

The details differ between banks, but the steps are usually similar:

1. Order certified copies of the death certificate. Banks typically won't accept photocopies. Our guide explains how many death certificates you need.
2. Contact the bank. Ask for the estate or deceased-accounts department, and ask exactly which documents it needs.
3. Complete the bank's claim form and show your ID. The bank checks that you are the person named.
4. Choose how to receive the funds. The bank may issue a check or transfer the money to an account in your name.

If you were not named on the account, the rules are different. See how to access a deceased person's bank account. If the account was joint, the surviving owner usually takes it first. In Minnesota, for example, a joint account goes to the survivor, and a POD beneficiary receives it after the last owner dies. Our joint bank account death guide covers that case.

What are the limits and risks of POD accounts?

• Creditors. POD accounts avoid probate, but they don't guarantee protection from debts. Under the Uniform Probate Code version in Arizona, for example, a person who receives a nonprobate transfer is liable for allowed estate claims to the extent the probate estate is too small, and only up to what they received. Other states have their own rules.
• Medicaid estate recovery. Federal law lets states recover certain Medicaid costs from a person's estate, and states may define "estate" to include assets that pass outside probate (42 U.S.C. 1396p). Recovery is limited to certain benefits for people who were 55 or older when they received them.
• No help with incapacity. A POD beneficiary has no rights while you're alive. If you become unable to manage money, your family needs a financial power of attorney.
• Mismatch with your will. If your will splits everything equally but one child is the POD beneficiary of your largest account, that child gets that money. Talk it through with your family and, if needed, an attorney.
• Naming your estate. That sends the account through probate and defeats the point.
• Estate taxes. The IRS lists the federal estate tax exclusion at $15,000,000 for people who die in 2026, so most families won't owe federal estate tax. Some states tax estates or inheritances at lower levels. Check your state.

What to do next

1. List your bank and brokerage accounts and check which ones already name a beneficiary.
2. Add or correct beneficiaries, and ask about contingent names.
3. Tell the person named and your executor where to find the account information. Our estate inventory checklist can help you organize it.
4. If you've just been named on someone's account, gather the death certificate and ID, and call the bank.