Want to make sure a loved one receives your assets after you pass away? Many people take steps to make that happen — usually by choosing a beneficiary for their retirement accounts or insurance policies — but few people consider what will happen to their bank accounts.

With payable-on-death (POD) accounts, you can easily solve that problem. PODs let you choose beneficiaries for your bank accounts, ensuring your heirs will get access to the money after you pass away.

You can easily turn any bank account into a POD, and by doing so, lift a major burden for your loved ones. As beneficiaries, they'll get immediate access to the money they may need for things like medical or funeral expenses without the burden of having to go through probate court.

How do payable-on-death accounts work?

You can easily turn your bank account into a payable-on-death (POD) account, also known as a transfer-on-death (TOD) or Totten trust, by designating one or more people as beneficiaries who will receive the funds when you pass away.

To convert your account to a POD, you simply have to complete a bank form in which you choose a spouse, a friend, a family member, or even a charity as your beneficiary. You can also choose multiple beneficiaries.

Converting a bank account to a POD doesn't give anyone access to the money while you're still living, even in the unfortunate event that you're incapacitated or otherwise need help covering your expenses. But it does give them immediate access after you pass on. They simply need to show their ID and the death certificate to the bank in order to receive the funds immediately.

How to add a beneficiary to your bank account

Adding a beneficiary to your bank account, or turning it into a POD account, is as simple as filling out and submitting a one- to two-page form. Here's how it works at most banks:

1. Request a “Payable on Death” form or a "Beneficiary Designation" form from your bank

2. Fill in the contact information for yourself and any joint owners on your account

3. Choose one or more beneficiaries, then add their contact information and Social Security number(s)

4. If applicable, choose other details such as the percentage each beneficiary will receive and your contingent beneficiaries

5. Make sure all account holders sign the form

6. If submitting by mail, notarization may be required

What types of bank accounts have the payable-on-death feature?

Most bank accounts have the payable-on-death feature. Your bank likely has this option for all of the following account types:

• Checking

• Savings

• Certificates of deposit (CDs)

• Money market accounts (MMAs)

• Safe deposit boxes

Do you need a payable-on-death bank account?

It's essential to use the POD feature on all of your bank accounts to ensure the money goes to your intended heirs or beneficiaries. If you don't, the funds could get tied up in probate court, costing your loved ones anywhere from $1,500 and up in fees, or cause the money to be distributed to your creditors first.

However, it's also crucial to make updates to your POD forms from time to time so they reflect your current wishes. These are some occasions when you may need to make a change:

• Your beneficiary passes away

• You update your will and your beneficiary designation does not match the will

• There's a significant change in your account balance

• Your intentions for your assets change for any other reason

One of the best ways to ensure your POD account aligns with your overall wishes is to talk to an estate planning expert or lawyer.

Should I add a loved one to my bank account as a beneficiary or a joint owner?

Adding a loved one as a beneficiary to a POD account is not the only way to give them access to your deposits. Another option is to add them as a joint account owner. The main difference between the two choices is that joint owners have access to the funds during your lifetime.

Here's what to consider before adding a joint owners instead of a beneficiary:

• They have all of the same rights and responsibility for the account as you.

• They can use the funds to cover your expenses if you become incapacitated.

• They can make withdrawals without your express permission.

• They have access to your bank statements and can view your transaction information.

For those reasons, you only want to name someone a joint owner if you fully trust them to manage your money responsibly and, if necessary, make decisions on your behalf.

Read more: Should unmarried couples have joint bank accounts?