Also known as: POD · payable on death
Written by attorneys · grounded in primary & secondary sources — see below
A beneficiary designation on an account directing that sums on deposit pass to one or more named beneficiaries upon the death of the party or parties. The designation creates a nonprobate transfer that takes effect by operation of the account terms rather than by will or intestacy.
Priscilla Parks opened a checking account at a local bank and completed the signature card designating her niece Pearl Porter as the payable-on-death beneficiary. After Parks died, the bank paid the remaining balance directly to Porter under the account terms. The funds never entered probate administration because the POD designation controlled distribution.
Patrick Phan established a bank account titled in his name as trustee for his son Parker Phillips. After Phan's death the bank released the balance to Phillips under the multiple-party account statute. The court treated the arrangement as a POD designation because the account terms named the beneficiary and contained no other trust property.
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A beneficiary named in a POD designation holds no present interest in the account while any party remains alive. The beneficiary's interest arises only upon the death of the last surviving party.
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A will cannot revoke or alter a POD designation. The account contract and the governing statute control the beneficiary designation instead of any testamentary instrument.
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Divorce revokes a POD designation in favor of a former spouse unless the divorce decree or a separate contract expressly preserves the designation. The funds then pass as part of the decedent's estate.
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A POD designation may appear on either a single-party or multiple-party account. The presence or absence of survivorship rights among the parties is determined separately by the account terms and the applicable statute.
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