What is transfertransfer on Death (Tod)?
Transfer on death (TOD) accounts can keep your estate planning intact while keeping your beneficiaries out of court. If you’re among the 57% of adults who don’t currently have a will or trust, your family is likely headed to probate court.
What is a Tod account and how does it work?
What Is a TOD Account? A transfer on death (TOD) account automatically transfers its assets to a named beneficiary when the holder dies For example, if you have a savings accountwith $100,000 in it and name your son as its beneficiary, that account would transfer to him upon your death.
What are the benefits of a Tod account in estate planning?
The most important benefit of a TOD account is simplicity. Estate planningcan help minimize the legal mess left after you die. Without it,, the probate system can take over the distribution of your assets. It can also name an executorof your estate and pay off your remaining debts with your assets.
Can I name multiple beneficiaries for a Tod account?
TOD account holders can name multiple beneficiaries and divide assets any way they like. If you’ve opened a TOD investment account to be split evenly between your two children, each will receive half of its holdings when you die. However, the beneficiarieshave no access or rights to a TOD account while its owner is alive.
How does a Tod account pass to a beneficiary?
TOD accounts pass directly to the beneficiaries outside of probate. A TOD account will pass to the TOD beneficiaries even if the account owner had a last will and testament or revocable living trust and regardless of what the will or trust says.
What is a direct transfer of assets (Tod)?
As Fidelity Investmentsnotes, a TOD is “a provision of a brokerage account that allows the account’s assets to pass directly to an intended beneficiary; the equivalent of a beneficiary designation.” Though laws governing estate planning vary by state, many bank accounts, investment accounts and even deedsare considered TOD accounts.
How do I set up a transfer on death account?
Transfer on death accounts are easy to establish. Each company handles the process a little differently, but, in general, TOD accounts are easy to establish. You can start by contacting your investment company to ask how to open a new TOD account or to inquire about changing your existing accounts to TOD accounts. 4