Financial & Estate Planning

There are several advantages to setting up a payable-on-death bank account, known as an “in trust for” account in some states. If you die while holding the account, the money will go to the named beneficiaries without going through probate. That might save your heirs time and money.


With these accounts, you retain total control while you’re alive. You can spend the interest income, withdraw principal, change beneficiaries, cancel the payable-on-death agreement, or close out the account. Meanwhile, neither the account beneficiaries nor their creditors have access to the money in the account.

However, payable-on-death accounts are inflexible. The money in the account will go to the beneficiaries you’ve named, at your death, and any other heirs will not get those funds. Therefore, you should set up your bank accounts this way only if you’re certain you want the named beneficiaries to inherit.