TOD and POD accounts: the simplest way to avoid probate in the US
2 August 2026 · Inherit Vault
Of every estate planning tool available in the US, the cheapest and fastest to set up might also be the most underused: naming a beneficiary directly on the account itself.
POD vs TOD
Payable-on-death (POD) applies to bank accounts and CDs, transfer-on-death (TOD) applies to brokerage and investment accounts, and in most states, TOD deeds now let real estate skip probate the same way. Both work identically in principle: the account holder names a beneficiary, and on death, ownership passes directly to that person with a death certificate, no probate court involved.
Why it's so effective
Unlike a will, which only takes effect after going through probate, a POD or TOD designation operates entirely outside the will, the beneficiary named on the account gets it regardless of what the will says, because the account was never legally part of the "estate" the will controls in the first place.
The mistake that undoes it
A POD or TOD beneficiary named years ago, an ex-spouse, an estranged relative, doesn't update itself. Divorce doesn't automatically remove a former spouse from every account (state laws vary on whether it revokes some designations automatically), and a will written afterward doesn't override it either. The account simply pays out to whoever's name is on file, which is exactly how life savings sometimes end up with the wrong person entirely, by pure administrative inertia.
What it doesn't solve
TOD and POD only cover the specific accounts they're set on, everything else, personal belongings, accounts without a designation, business interests, still goes through the will and probate as normal. And if a named beneficiary predeceases the account holder with no backup named, that account can fall back into the estate and probate anyway.
The fix is a five-minute form at your bank or brokerage, repeated for every account, and then reviewed every few years, especially after a divorce, remarriage, or a beneficiary's death. What's genuinely hard is remembering which accounts have a designation and which don't, years later, that's a single list worth keeping somewhere your executor can actually find it.
Leave your family a map, not a mystery.
Inherit Vault is a digital inheritance vault: every account, policy, and instruction your family will need, encrypted so only you can read it, released to your executor when it genuinely matters.
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