Transfer-on-death and payable-on-death accounts: how they work
These designations bypass probate entirely. Here is how to claim them and what to watch for.
5 min read
Many bank and brokerage accounts let the owner name a beneficiary directly on the account. These are called payable-on-death (POD) for bank accounts and transfer-on-death (TOD) for brokerage accounts. When the owner dies, the named beneficiary becomes the new owner without probate, on presentation of a death certificate and identification (Consumer Financial Protection Bureau [CFPB], 2023).
Claiming the funds
Bring a certified death certificate and a government-issued ID to the bank or brokerage. The institution will close the original account and either cut a check or transfer the assets in kind to a new account in your name.
Beneficiary designations override the will. If the will leaves accounts to one person but the bank lists another as POD beneficiary, the bank generally must pay the named beneficiary (American Bar Association [ABA], 2023).
Common surprises
If no beneficiary is named, or if the named beneficiary has predeceased the owner, the account usually falls into the probate estate. Joint accounts with right of survivorship pass automatically to the surviving owner without probate (CFPB, 2023).
Trace the accounts
NextStep helps you find unclaimed property and check beneficiary designations across common institutions.