Beneficiaries extend beyond the people you mention and leave property to in your will. Insurance policies and retirement plans have designated beneficiaries and the proceeds go directly to these individuals without the necessity of probate when you die. The same holds true for bank accounts in some states. Naming a beneficiary turns it into a payable-on-death account that can pass directly to a beneficiary with minimum fuss.
During Your Lifetime
Your beneficiary has no ownership interest or rights to the money in your bank account while you're alive. She can't withdraw the money, and you can change your mind and take her off the account if you want to. It's yours to do with as you wish because the payable on death designation, or POD, doesn't kick in until your death.
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After Your Death
After your death, your beneficiary needs only to provide a copy of your death certificate and a form of ID to take possession of the account. A possible complication might arise, however, if you leave more debts than assets with which to pay them. In some states, the executor or administrator of your estate is authorized to claim assets that do not pass through probate so as to pay as many debts of the estate as possible.
