Payable-on-death (POD) refers to a designation that allows a bank account or other asset to be directly transferred to its assigned beneficiary upon the death of the owner. POD is a way to avoid the difficulties and expenses of probate proceedings that occur with a will, and POD allows for seamless transfer of an asset to an individual. Depending on the state, POD may be used for multiple beneficiaries and might be allowed to differentiate the payments to multiple beneficiaries. The owner of a POD asset can change the beneficiary while living, but one drawback of POD is that an alternative beneficiary cannot be assigned. So if the beneficiary passes before receiving the asset, the asset will pass according to any other asset in a will.
[Last updated in July of 2021 by the Wex Definitions Team]