Payable-on-Death Account: Definition and How It Works in California

By Eric Ridley, attorney, Ridley Law. Updated September 2026.

A payable-on-death account, often called a P.O.D. account, is a bank account that names a beneficiary to receive the balance when the owner dies. The money passes directly to that person outside probate, and the owner keeps full control of the account while alive.

How it works in California

Ridley Law’s comparison of payable-on-death accounts and a trust covers when this simple option makes sense and when it does not. Prob. Code, § 5140 defines a P.O.D. account as one payable to one or more parties during their lifetimes, then on the death of all of them to one or more P.O.D. payees.

Under Prob. Code, § 5302, any sums remaining in the account when the owner dies belong to the named P.O.D. payee, or to the survivor if more than one payee is named and one has already died. The beneficiary generally just needs a death certificate and identification to claim the funds directly from the bank, without going through probate.

Why it matters

A payable-on-death designation controls the outcome regardless of what a will says. For example, someone updates their will to leave all of their money to one child, but never updates the P.O.D. beneficiary on a savings account naming a different child from years earlier; the account passes to whoever is named on the account, not to whoever the will names.

Common mistakes

Forgetting to update a P.O.D. beneficiary designation after a divorce, remarriage, or death in the family. Assuming a will overrides a P.O.D. designation; it does not. Naming a P.O.D. beneficiary who is a minor without also arranging how a bank will actually release funds to a child, which can force a guardianship or blocked account.

Related terms

• Beneficiary Designation: the broader category of naming who receives an asset directly, of which a P.O.D. designation is one form.
• Transfer-on-Death Deed: the equivalent tool for real property instead of a bank account.
• Inherited IRA: a different kind of beneficiary-driven account, with its own federal tax rules a P.O.D. bank account does not have.

Part of the California estate planning glossary. For the full treatment, see Are Payable-on-Death Accounts as Good as a Trust? (California)