How to Title Your Assets: Bank Accounts (POD)

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Wondering how to title your assets? Find out how to ensure that your assets will pass on to your designated beneficiary with this handy guide.

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How to Title Your Assets: Bank Accounts (POD)


Guys and gals!

I was on the phone with one of my friends’ moms the other day. 

She is in her late 60s and lives by herself – she is a widow. 

My friend, Jennifer, asked me to talk to her mom just about the basics regarding financial planning advice. 

Jen wanted to make sure we could button up some of the loose ends if there were any. 

I was happy to help.

So, we jumped onto a phone call with Jennifer’s mom and reviewed her financial situation and some of the questions her mom had. 

Most of those questions revolved around “what is going to happen to my assets when I die?”

Recommended reading: can you inherit debt from your parents?

Now, by assets I mean money.

As you may know, when someone passes away, their money also has to be passed on to a beneficiary. 

The beneficiary typically is named by the original account owner in some form of document, like in a legal Will or sometimes the beneficiary is named at the account itself. 

If there is no named beneficiary, then the assets (or the accounts) will be sent to probate.

You should be getting goosebumps when you hear the term probate. 

Probate is the public court system. 

It means anything that goes through probate is public, it takes a lot of time and it can cost you a lot of money. 

In other words, make sure you title those accounts properly. Make sure you designate your beneficiary before you pass away. 

Your beneficiaries will thank you later!

And this brings us to the topic of my conversation with Jennifer’s mother: what do we actually do with your bank accounts and your investment accounts?

Now if you are like most people, then you would likely just open a bank account (savings or checking account).

So now the question begs, how do I title those accounts?

Find out below what I explained to Jennifer’s mother.

beneficary hand and arrows

Primary vs Contingent Beneficiaries


Jennifer’s mom had a few checking accounts and one savings account. 

As we dug through the account records, I came up with the question of whether her mom had designated any beneficiaries for these accounts. 

Jen’s mom didn’t know what that meant. 

And to think about it – I am sure many people wouldn’t know what that means, either – designating a beneficiary to their accounts. 

This subject is not talked about in the average working world. 

Because many people don’t like speaking about what happens to them once they die. 

So I discussed the types of beneficiaries that one could typically add to any account: primary and contingent beneficiaries. 

Let’s discuss the difference between these two types of beneficiaries

Primary beneficiary


A primary beneficiary is someone who will receive your assets first, upon your passing. 

You can split the percentage of assets going to a primary beneficiary so that you can add sometimes up to 10 primary beneficiaries. 

It depends on the institution and the state you are living in, that will govern how many primary beneficiaries you can add to your bank accounts. 

Contingent beneficiary


A contingent beneficiary is someone who will receive your assets after all primary beneficiary options have been exhausted. 

In other words, let’s say that Jen’s mom designated her only daughter – Jennifer – to be the primary beneficiary of her bank account. 

Now let’s say that a terrible event led to Jen’s passing. 

This is typically when the contingent beneficiary would receive the account assets – only after the primary beneficiary option has been exhausted.

It’s very typical for spouses to designate their other spouse as the primary beneficiary on accounts. 

It’s also typical for spouses to designate brother, sisters, or other close family members or friends as the contingent beneficiary. 

As we dive into more complicated estate planning matters, a trust could also be named as either the primary or contingent beneficiary of an account. 

It just depends on the situation.

Recommended reading: 3 Estate planning documents every millennial should have 

banking money hand umbrella piggy bank

How do I Title my Bank Accounts?


Remember this:
When you open a bank account, be it a checking or savings account, beneficiaries are not automatically designated when opening an account.

Think about it – if you have $50,000 stashed away in a bank savings account and something terrible happens to you, where you pass, what happens to that $50,000? 

It will have to go through probate – the public court system – to determine who will receive that money. 

It’s not the way to go about things.

So, to prevent this worst-case situation from occurring, let’s try to be proactive. 

By proactive, I mean naming a beneficiary on your bank accounts.

Step #1:


Go to the bank to request a Payable on Death form

This is known as a POD form.

Bank will NOT give you the luxury of letting you know that you will need to fill out this form as you open your bank account. 

You will have to physically ask them for this form. 

99% of the time, it won’t cost you a penny. It’s just another form for you to fill out.

Why don’t most (if any) banks offer this POD option just as you open a new account?

I don’t know. That’s the way it’s been – so you need to take the first step. 

Step #2:


Think long and hard about who you will designate as a primary. 

Would it make sense to designate your spouse as a primary beneficiary? 

Would it make sense to designate your child as a contingent beneficiary? 

These are questions only you can answer. 

I can only help you in guiding you on what to ask. 

The solution, however, has to come from your heart. 

one million dollar check

Payable on Death Definition


A Payable on Death (POD) account is just a fancy way of titling your bank accounts for the case you pass away. 

Although this is a very morbid and dark subject, it’s necessary to discuss how you envision your assets to be distributed, upon your passing.

By titling a bank account as a POD, you’ll have the option to designate your primary beneficiary. 

In other words, you will determine who will receive your assets if and when you pass. 

Talk about ruling from the grave.

The reason why many individuals like POD accounts is because in most cases, it’s free (or at minimum inexpensive) to set-up and it’s very fast. 

Normally, you’ll just have to fill out a short document with your personal information along with the information of your designated beneficiary. 

You sign the form and hand it to the bank associates for processing. 

In most cases, you will also be able to change your beneficiary designation.

Let’s say you designated a parent to be the beneficiary of your bank account. 

Let’s also say that twenty years later, that parent is no longer living. In 99% of the cases, you will be able to change that beneficiary designation. 

The only case you won’t be able to change your beneficiary designation is if you see the word “irrevocable beneficiary.” 

That’s when you cannot make a change. 

Assigning an irrevocable beneficiary is not very common, however, and typically does not apply to individual cases – it’s used more often in cases involving trust agreements or other corporate agreements.

person thinking about money

Payable on Death Account Cons


Con #1: No contingent beneficiaries

I’d say the major drawback of a POD account is that you CANNOT add a contingent beneficiary – that is a secondary beneficiary. 

For some people, that doesn’t matter. 

For others, it could matter especially seeing if their primary beneficiary may succumb to health issues or may not be around longer. 

Of course, the positive side is that you can change your beneficiary. 

However, most people forget to do so or just simply don’t have the time. 

In these cases, it’s always a good idea to be accurate with your beneficiary designations the first time around.

Con #2: Limited coverage

I highly doubt this second drawback will impact many people, but I do think it’s worth mentioning. 

POD account designations only cover up to $250,000 per account, up to 5 accounts. 

That means you can “only” have up to $1,250,000 of POD coverage across 5 different bank accounts. 

The reason why I say this situation might not apply to that many people is simply that most don’t have that extra cash lying around. 

Second, if you do have that cash lying around – then we should seriously discuss you investing that cash instead of having it lying around.

Closing Thoughts


After talking through these thoughts with Jen’s mom, I could see relief in her eyes. 

Although this certainly is not a topic many want to speak about – it’s a necessary evil to make sure that your loved ones are taken care of, once you pass.

Jen’s mom was able to title her bank accounts using the POD language and both Jen and her mom felt more at peace.

Although titling bank accounts using POD language is just a tiny piece of the puzzle, it can certainly help relieve you.

Remember: POD accounts are typically used for cash accounts only. 

This means bank accounts. 

In most cases, you just have to go to the bank teller and ask them for this document. 

The largest drawback is that you can only add a primary beneficiary. 

Think long and hard before you make that decision. 

Although you can make changes to that decision later on, it’s always better to be correct the first time around.

Your bank accounts will thank me later!

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Fiona Smith
Fiona Smith
The Millennial Money Woman was founded by Fiona Smith. She holds her Master of Science Degree in Personal Financial Planning and has co-founded a local non-profit community teaching financial literacy to young professionals.

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