Michigan POD and TOD Beneficiary Designations: Skip Probate on Accounts and Cars

If you have a Michigan checking account, an IRA, a brokerage account, and a car, you can keep all four of them out of probate with about 60 minutes of work and zero dollars in attorney fees. The trick is called Payable-on-Death (POD) for bank accounts, Transfer-on-Death (TOD) for investments and vehicles, and beneficiary designations for retirement accounts and life insurance. These tools are the cheapest, fastest, simplest piece of estate planning available in Michigan -- and most people never use them, which is why so many estates end up in probate court paying attorney fees that could have been avoided with a 10-minute form.

Why POD/TOD is the Cheapest Estate Planning You Can Do

When a Michigan resident dies, every asset titled in their name alone has to go through probate before it can transfer to the heirs. Probate in Michigan typically takes 7 to 12 months and costs 3 to 5 percent of the asset's value in attorney and court fees. Even a small estate -- a $20,000 checking account, a $35,000 IRA, a paid-off vehicle, and some personal property -- can rack up $5,000 in probate fees and tie up the money for the better part of a year.

POD and TOD designations let you sidestep all of that. The asset transfers directly to the named beneficiary the moment the financial institution gets a death certificate. No probate court. No attorney fees. No waiting period. The beneficiary walks into the bank with a death certificate and ID, and the money is theirs that day.

Best of all: every Michigan bank, credit union, brokerage, and Secretary of State office offers these designations at zero cost. There is no attorney fee, no recording fee, no notary requirement (for most). It is the single highest-leverage move in DIY Michigan estate planning.

POD vs. TOD: What's the Difference?

The two terms are functionally identical and are often used interchangeably, but the technical distinction matters because different institutions use different language:

• POD (Payable-on-Death) is the term banks and credit unions use for checking, savings, money market, and certificate of deposit (CD) accounts. The money is "payable" to the named beneficiary at your death.
• TOD (Transfer-on-Death) is the term brokerage firms use for non-retirement investment accounts -- stocks, bonds, mutual funds, ETFs. The securities "transfer" to the beneficiary at your death.

Both work the same way: while you are alive, you control the account 100 percent. The named beneficiary has zero rights and zero access. They cannot see balances, withdraw funds, or even know the account exists if you do not tell them. The moment you die, they become the legal owner upon presenting a certified death certificate.

Bank and Credit Union Accounts (POD)

Every Michigan bank and credit union -- Chase, Comerica, Flagstar, Fifth Third, Huntington, Lake Michigan Credit Union, DFCU, Genisys, Michigan First, every single one -- offers POD designations on demand. The exact form name varies but the concept is identical.

How to do it

1. Walk into your local branch (or log into online banking, but in-branch is faster for the first time).
2. Ask for a "POD beneficiary form" or "in trust for designation" or simply tell the teller "I want to add a payable-on-death beneficiary to this account."
3. You will fill out a one-page form with the beneficiary's full legal name, date of birth, address, and Social Security number (some banks accept partial SSN). They are not required to sign anything or even know about it.
4. Sign and date. The bank stores it. Done.

You can name multiple beneficiaries with percentage shares (50/50, or 33/33/34, or any combination). You can name a backup beneficiary in case the primary predeceases you. You can update or remove the designation at any time without anyone's permission.

What banks treat as POD-eligible

• Checking accounts
• Savings accounts
• Money market accounts
• Certificates of deposit (CDs)

Most Michigan banks do NOT allow POD on safe deposit boxes -- the box and its contents pass through your estate by default. If you have important documents in a safe deposit box, give a trusted family member access while you are alive (Michigan banks call this "joint access" or "deputy access").

Brokerage and Investment Accounts (TOD)

Vanguard, Fidelity, Charles Schwab, E*TRADE, Robinhood, Edward Jones, Raymond James, Stifel, and every other broker operating in Michigan offers TOD beneficiary designations on individual and joint taxable brokerage accounts.

How to do it

1. Log into your brokerage account.
2. Look for "Beneficiaries" or "Account Profile" in account settings. (Vanguard buries it under "Profile & Account Settings"; Fidelity has it under "Beneficiaries"; Schwab has it under "Update Beneficiaries.")
3. Add primary and contingent (backup) beneficiaries with percentage shares.
4. Submit electronically. Most brokers do not require a notary or paper signature.

The TOD designation overrides whatever your will says. If your will says "everything to my spouse" but your TOD on the brokerage account says "to my brother," the brother gets the brokerage account. The beneficiary form ALWAYS wins.

What about joint accounts?

If you and your spouse own a brokerage account jointly with rights of survivorship, the surviving spouse automatically inherits the entire account upon the first death. You can ALSO add a TOD on the joint account, which kicks in only after both joint owners die. This is the standard setup for most Michigan married couples.

Retirement Accounts: 401(k) and IRA Beneficiaries

Retirement accounts use beneficiary designations instead of POD/TOD, but the effect is the same: the account transfers directly to the named beneficiary at death, completely bypassing probate. Every IRA, 401(k), 403(b), 457, and Roth account asks you to name a beneficiary at the moment you open it.

The catch: this is the easiest place for Michigan families to leave their estate planning broken. People open a 401(k) at their first job, name their parents as beneficiary, never update it, get married, have kids, get divorced, and die 30 years later with a six-figure 401(k) still pointing at parents who died 20 years before them. The money then goes to probate -- defeating the entire point of the beneficiary designation.

What every Michigan resident should do this week

1. Log into every retirement account you have -- old 401(k)s from former jobs included.
2. Check the named primary and contingent beneficiaries.
3. Update them to reflect your current life: spouse first, kids second, descendants third (or whatever fits your situation).
4. Name a contingent beneficiary on every account. If your primary predeceases you and there is no contingent, the asset goes to probate.

Special rule for Michigan married couples

Federal law (ERISA) requires that your spouse be the primary beneficiary of an employer-sponsored 401(k) or pension unless they sign a notarized waiver. You cannot name your kids as primary on a 401(k) without your spouse's notarized consent. IRAs do not have this rule -- you can name anyone you want.

Life Insurance Beneficiaries

Life insurance policies pay out to the named beneficiary directly, completely outside probate. The exception: if you name "my estate" as the beneficiary, the proceeds go through probate. Always name actual people (or a trust), not your estate.

Michigan residents should review life insurance beneficiaries any time there is a major life change (marriage, divorce, birth, death). Like 401(k)s, life insurance is the asset most likely to have a stale beneficiary designation that does not match your current wishes.

Vehicles, Boats, and Watercraft

Michigan does not currently offer a true TOD designation on vehicle titles -- legislation was introduced multiple times between 2019 and 2024 but never passed. Some states like Ohio allow you to put a beneficiary directly on the title; Michigan does not.

What Michigan does offer is a streamlined post-death transfer process that avoids probate for most families. Under MCL 257.236, if the deceased's only probate assets are vehicles totaling less than $60,000 in value (or under $300,000 for watercraft), the surviving spouse or closest next of kin can transfer the title at a Michigan Secretary of State office without opening a probate estate at all.

How the Michigan vehicle transfer works after death

The heir brings these to a Secretary of State office:

• The original vehicle title (if available)
• A certified copy of the death certificate
• Form TR-40 (Certification from Heir to a Vehicle, updated January 2026 -- replaces the old TR-29 form)
• Proof of Michigan no-fault insurance
• Valid photo ID

Fees: $15 title transfer, $10-15 plate transfer. No probate, no attorney, no court. Sales tax is generally not collected when transferring to an immediate family member.

What you can do now to make this easier for your family

1. Title vehicles jointly with "full rights to survivor" if you are married. When the first spouse dies, the survivor presents the title and a death certificate and the transfer is automatic, no TR-40 needed.
2. Pay off vehicles before death where possible. A lien on the title has to be cleared before any transfer can happen.
3. Keep the original title in a place your family knows about. Michigan SOS will issue a duplicate, but the process adds a week and another fee.
4. Watch for Michigan TOD vehicle legislation. If Michigan adopts a TOD title designation in the future (currently dormant in committee), update titles immediately.

What About Real Estate?

This is where Michigan is unusual. Most states use a Transfer-on-Death deed (TOD deed) for real estate, but Michigan does NOT. Instead, Michigan recognizes the Lady Bird deed (also called an enhanced life-estate deed), which works almost identically -- the property transfers automatically at your death without probate, you keep full control while alive, and there is no five-year Medicaid lookback.

If you are a Michigan homeowner and you do not have a Lady Bird deed, your house will go through probate when you die. This is the single most expensive thing you can fix with one document. We have a separate guide that walks through the Lady Bird deed step by step: Michigan Lady Bird Deed: Avoid Probate on Your Home.

Mistakes That Send Your Money to Probate Anyway

Naming "my estate" as the beneficiary

This is the most expensive mistake. Naming your estate as the POD/TOD/insurance beneficiary defeats the entire purpose -- the money has to go through probate before it can be distributed under your will. Always name actual humans, a trust, or a charity. Never your estate.

Naming a minor child directly

If you name a child under 18 as the direct beneficiary, the bank, brokerage, or insurer cannot release funds to a minor. The probate court has to appoint a conservator, who manages the money until the child turns 18 and then hands it over in one lump sum. This usually costs $2,000-$5,000 in court fees and locks the money up for years. Better options: name a trust for the minor, use a UTMA custodial account, or name an adult guardian.

Forgetting to name a contingent beneficiary

If your primary beneficiary predeceases you and you never named a backup, the asset goes to probate by default. Always name at least one contingent beneficiary on every account.

Stale beneficiary designations

Divorce, remarriage, the birth of a new child, the death of a parent, a falling-out with a sibling -- any of these is a reason to update beneficiary designations. Michigan automatically revokes designations to a former spouse on divorce, but this only applies to limited types of accounts. Always update manually after any life change.

Mismatched will and beneficiary designations

If your will says "everything to my kids equally" but your IRA beneficiary form names just one of your three kids, only that one kid gets the IRA. The will does not override the beneficiary form. Read every account's beneficiary form alongside your will to make sure they tell the same story.

Not telling anyone the accounts exist

If your family does not know an account exists, they will not know to claim it. Keep a list of every account, where it is held, and who the beneficiary is. Store the list with your other estate documents. Michigan Treasury holds millions of dollars in unclaimed property because heirs never knew the accounts existed.

The Order to Tackle These In

If you have not done any of this yet, here is the order to do it in for maximum impact:

1. 401(k)s and IRAs -- typically the largest assets, and most likely to have stale beneficiary designations. Tackle every account, including old ones from former jobs.
2. Life insurance -- check primary and contingent on every policy, including any group life through your employer.
3. Brokerage accounts (TOD) -- update online in 5 minutes per account.
4. Bank and credit union accounts (POD) -- one branch visit covers most accounts at the same institution.
5. Vehicles -- if married, retitle jointly with full rights to survivor. If single, accept that your vehicle goes through the simple Michigan transfer process at SOS.
6. Real estate -- record a Lady Bird deed (separate process; see our Lady Bird deed guide).

Total time investment: about 4-6 hours spread over a week or two. Total cost: zero. The amount of probate fees you save: potentially $5,000-$15,000, plus 6-12 months of waiting time for your family.

Frequently Asked Questions

Does my will cover any of this?

No. Beneficiary designations on POD, TOD, retirement, and life insurance accounts ALWAYS override the will. The only assets your will controls are assets that pass through probate. Beneficiary designations skip probate entirely. This is exactly why people set them up.

Do I need a notary for POD/TOD changes?

Usually no. Most banks, brokerages, and 401(k) plans accept signed forms without a notary. Some (like spousal waivers on a 401(k)) require notarization. Read the form.

Will my beneficiaries owe taxes?

It depends on the asset. Bank accounts and brokerage accounts transfer with no income tax to the beneficiary (they get a stepped-up basis on inherited securities). Traditional 401(k)s and traditional IRAs are taxable to the beneficiary as ordinary income when withdrawn (the SECURE Act now requires most beneficiaries to drain inherited IRAs within 10 years). Roth accounts are tax-free. Life insurance proceeds are generally tax-free.

What if my beneficiary dies before me?

The asset goes to your contingent beneficiary if you named one. If you did not, the asset goes through probate to be distributed under your will. Always name a contingent.

Can I name a charity as the beneficiary?

Yes. Naming a charity as POD/TOD or 401(k) beneficiary is one of the most tax-efficient ways to leave a charitable gift. The charity does not pay taxes on inherited retirement accounts the way human beneficiaries do.

What if I want the money split unequally between kids?

Most beneficiary forms accept percentage allocations. You can name three kids at 50/30/20, or two kids at 50/50 with a contingent of "my grandchildren per stirpes." Read the form -- the most flexible options are usually buried in a "more options" link on online forms.

Should I just do all this with a trust instead?

For families with complex situations -- minor children, special-needs heirs, blended families, businesses -- a revocable living trust gives you more control over how and when assets reach beneficiaries. For everyone else, POD/TOD plus a will plus a Lady Bird deed plus durable powers of attorney does the same job for far less money.

Does Michigan have a TOD deed for real estate?

No. Michigan instead recognizes the Lady Bird deed (enhanced life-estate deed), which serves the same purpose -- automatic transfer at death without probate -- and includes additional benefits like immunity from Medicaid five-year lookback. See our Lady Bird deed guide for details.

Get the Foundation in Place

POD/TOD designations are the cheapest piece of estate planning you will ever do, but they are also the most often forgotten and the most often left stale. They work best as part of a complete plan: POD/TOD on accounts and vehicles, a Lady Bird deed on the home, and a will with durable powers of attorney to cover everything else and to handle decisions while you are alive.