What Happens to Your Bank Accounts When You Die Without a Payable-on-Death Designation in North Carolina
A Simple Oversight That Can Create a Big Headache
It’s a situation that happens more often than you might think. A loved one passes away, and the family assumes their bank accounts will automatically transfer to the surviving spouse or children. After all, that’s what Mom or Dad always said: “Everything will go to you when I’m gone.”
But when they arrive at the local First Citizens Bank in Garner or a PNC branch in Raleigh, they’re told something unexpected: the account is frozen. The funds can’t be accessed until the estate goes through probate. Bills are due, funeral costs are mounting, and emotions are high. The family thought everything was “taken care of,” but one missing detail, the lack of a Payable-on-Death (POD) designation, changes everything.
This blog explains what really happens to bank accounts without a POD beneficiary in North Carolina, how it can impact your family, and what simple steps can prevent confusion, delay, and financial stress.
When Your Parent Passes Without a POD: Amy’s Story
Amy, a busy Gen-X professional in Cary, got the call no one wants. Her father, a retired lineman, had passed away unexpectedly. In the days that followed, Amy handled arrangements, met with the funeral home, and began sorting through her father’s paperwork.
She soon discovered her dad had a checking account at First Citizens Bank in Garner with about $25,000. This was his “just in case” money. She assumed, like many adult children do, that she could use that account to pay for his final expenses. But when she visited the branch, the teller gently explained the reality: because her father hadn’t listed anyone as a Payable-on-Death beneficiary, the bank couldn’t release the funds.
Instead, Amy was told she would need to open an estate through the Wake County Clerk of Superior Court. That meant filing paperwork, waiting for an executor to be appointed, and possibly hiring an attorney to help her navigate the process.
Weeks turned into months. Meanwhile, bills piled up. Amy eventually reimbursed herself from the estate, but the stress and delay made an already painful time even harder.
Her father’s mistake wasn’t unusual. He simply didn’t know that failing to list a POD beneficiary would tie up his money in probate.
What Exactly Is a Payable-on-Death (POD) Designation?
A Payable-on-Death designation allows you to name a beneficiary, or beneficiaries, to receive the funds in your account directly when you die. In North Carolina, a POD designation avoids probate entirely.
Here’s how it works:
You fill out a form at your bank or credit union (for example, at PNC Bank, First Citizens, or State Employees’ Credit Union) listing who should receive the funds.
Upon your death, your beneficiary only needs to present a death certificate and identification to claim the funds.
The account does not become part of your probate estate, and your beneficiary can access it within days instead of months.
It’s one of the simplest estate planning steps you can take — but without it, your money gets swept into the probate process.
What Happens When There’s No POD Designation in North Carolina
When someone dies without a POD beneficiary or joint account holder, the account legally belongs to the estate of the deceased.
That means:
The account is frozen until the Clerk of Court appoints a personal representative or executor.
The executor must identify all assets, pay valid debts, and file inventories with the court (see NC General Statute Chapter 28A).
Only after debts, taxes, and fees are paid can the remaining funds be distributed to heirs.
Even in relatively straightforward cases, probate in Wake County or Johnston County often takes six to twelve months. During that time, family members can’t access those funds, not even to pay for funeral expenses or immediate bills.
For families who depend on that money to stay afloat, those delays can be devastating.
When Joint Accounts Don’t Solve the Problem: Linda and Mark’s Story
Linda and Mark, a retired couple from Clayton, assumed their finances were simple. They had joint checking and savings accounts at PNC Bank, but Mark also had a separate money market account he’d opened years before.
When Mark passed away, Linda discovered that account was only in his name and had no POD designation. Even though she was his surviving spouse, the bank couldn’t release the funds without Letters Testamentary from the court.
Linda had to hire an attorney, navigate probate, and wait nearly eight months before she could access the account. She was stunned. “We thought everything was set up to go to each other,” she said. “It never occurred to us that one old account would cause such a mess.”
Joint accounts can help, but they don’t always cover every situation. That’s why a comprehensive estate plan, including POD designations, is so critical.
The Young Family That Thought Their Will Was Enough
Josh and Emma, a young couple in Garner, did what many responsible parents do. They had wills prepared shortly after their first child was born. They assumed those wills would take care of everything if something happened to either of them.
What they didn’t realize was that not all their accounts were jointly owned. While their checking account at First Citizens Bank was joint, Emma also had a separate savings account she’d opened before they were married. She had never added Josh as a co-owner or listed a Payable-on-Death (POD) beneficiary.
When Emma tragically passed away in an accident, Josh learned that the separate savings account, worth nearly $10,000, was frozen. Because it was titled solely in Emma’s name and had no POD designation, the bank couldn’t release the funds until her estate went through probate in Johnston County.
Josh eventually gained access after months of paperwork and court filings, but the experience left him shaken. “We thought our wills covered everything,” he said. “I didn’t realize accounts in just one name still had to go through the court.”
This situation is incredibly common among young families. Having a will is an important first step. But, without properly titled accounts and beneficiary designations, assets can still be delayed in probate.
Probate Isn’t Free or Fast
Probate is a court-supervised process, and in North Carolina it comes with filing fees, publication costs, and sometimes attorney’s fees.
A few key facts for North Carolina residents:
The probate filing fee is $120.
The probate court will assess a fee of 40 cents for every $100 or a minimum of $15.00 whichever is more.
The process can take months to over a year, depending on complexity and the county’s backlog.
The Clerk of Court’s office (in Wake County, Johnston County, or Harnett County) must approve nearly every step.
For many families, the emotional cost of probate far exceeds the financial one. It’s not just about dollars. It’s about time, stress, and uncertainty.
Why Families Delay and Why That’s a Mistake
Most people don’t neglect POD designations out of carelessness. It’s usually one of these reasons:
They assume their will covers everything.
They think joint ownership solves the problem.
They plan to “get around to it” but never do.
They simply don’t realize what happens when no beneficiary is listed.
But failing to act has real consequences. People are often motivated more by loss aversion than by potential gain. It’s not just what your family might inherit. It’s what they could lose in time, energy, and peace of mind if you leave things undone.
Taking a few minutes now to confirm your account designations can spare your loved ones enormous frustration later.
How to Protect Your Bank Accounts and Your Family
The good news? This problem is easy to fix.
Review all your bank and credit union accounts.
Check whether they list a POD or “beneficiary” on the account.Add or update your designations.
You can usually complete a simple form at your bank. Be sure to include secondary beneficiaries if possible.Coordinate with your estate plan.
POD designations should align with your will or trust. If your trust owns certain assets, your attorney can help ensure account titles match your overall plan.Avoid naming minor children directly.
In North Carolina, minors can’t legally own property. Instead, consider naming a trust as the POD beneficiary, so funds can be managed responsibly for your children.Work with an experienced estate planning attorney.
An attorney familiar with local probate rules can help you align everything: your accounts, real estate, and legal documents, so your loved ones can avoid delays and court involvement.
How The Happy Lawyer Helps North Carolina Families
At Mackintosh Law, PLLC in Garner, North Carolina, we see this scenario far too often. Families who thought everything was “taken care of,” only to find out that one missing beneficiary form sends them straight into probate.
Our firm helps families in Garner, Clayton, Cary, Raleigh, and surrounding areas create clear, coordinated estate plans that prevent these headaches. We guide you through updating your beneficiary designations, reviewing your existing accounts, and aligning your financial institutions with your estate planning documents.
Whether you bank at First Citizens, PNC, or your local State Employees’ Credit Union, we help ensure your accounts reflect your wishes and that your family won’t face unnecessary court delays.
A Cautionary Truth
It’s easy to assume that your loved ones will simply “handle things” when you’re gone. But as these stories show, one overlooked step can lead to months of confusion and court involvement.
Estate planning isn’t just for the wealthy. It’s for anyone who wants to make life easier for their family. Reviewing your account titles and designations is a small act of love with an enormous impact.
If you’re unsure whether your accounts are properly set up, or if it’s been years since you reviewed your estate plan, now is the perfect time to take action.
At Mackintosh Law, PLLC in Garner, North Carolina, we make estate planning simple, understandable, and tailored to your family’s needs. Let’s make sure your loved ones never have to face frozen accounts, court delays, or unnecessary stress.
Because your legacy, and your family’s peace of mind, deserve better.
Ready to Take the Next Step
If you want to make sure your estate plan is in place or you need to revise it, schedule a complimentary Discovery Call with me. You can schedule that Discovery call using the below button or you can call me at (919) 336-4219 and request a Discovery Call Appointment. Let’s make sure you and your loved ones are protected.
