Banks and credit unions in the U.S. allow account holders to add pay-on-death beneficiaries to their accounts in order to avoid probate. Anyone can add a POD beneficiary to an existing account by providing the financial institution with some basic information about the named beneficiary. After the death of the account owner, the beneficiary can close the account and withdraw the remaining funds. Most banks only require the beneficiary to produce a valid ID and a death certificate before disbursing account funds.
Decide who to name as your account beneficiary. You can change account beneficiaries as frequently as you like. If you keep a substantial balance in your account, consider the fact that your beneficiary will have access to use the funds as they please after you die. You can add up to three POD beneficiaries per account. Contact the person you intend to name as the beneficiary and ask for his date of birth and Social Security number. Banks require that information when adding POD beneficiaries to accounts.
Go to your bank. Provide an account representative with your ID and your account number. Ask the representative to add a POD beneficiary to your account. Provide the banker with the name, date of birth and Social Security number of your designated beneficiary. The banker must create a personal profile for the beneficiary and then add her name to your account.
Sign a new signature card for the account. The POD beneficiary does not have to sign a signature card because he only has signing privileges in the event of your death. Ensure that the banker has correctly recorded the beneficiary's name, Social Security number and date of birth.
The Federal Deposit Insurance Corporation insures accounts held by any one person at a single institution for up to $250,000. You receive additional coverage of $250,000 for each account beneficiary. You can add POD beneficiaries to joint accounts, but the beneficiary only has access to the account after the death of the second owner.
Make sure that your will or trust documents reflect the fact the you designated a beneficiary on your bank account. You could create probate issues after death if your will instructs the executor to handle your bank accounts and disburse funds to someone other than the named POD beneficiary.