You can avoid the time and expense of having your assets probated in court by reregistering them with a transfer-on-death, or TOD, designation. Upon your death, TOD assets automatically pass outside of probate to your named beneficiary. The TOD registration doesn’t affect your ownership rights, and the beneficiary has no access or claim to the asset until you die. If the asset is jointly owned, the asset first passes to the surviving joint owner. Unless the surviving joint owner changes the TOD designation, the asset will ultimately pass to the TOD beneficiary.
TOD Security Registration Act
Under the TOD Security Registration Act, you can transfer all of your securities to your named beneficiaries without opening a probate estate. The act lets you transfer your entire brokerage account or individual stocks, bonds and mutual fund shares to specific beneficiaries. The brokerage firm or financial institution will automatically reregister the security into the named beneficiary once satisfactory proof of death is established. To date, every state, with the exceptions of Texas and Louisiana, has adopted the TOD Security Registration Act.
TOD Vehicle Registration
If you live in Arizona, California, Connecticut, Indiana, Kansas, Missouri, Nebraska, Nevada, Ohio or Vermont, you can transfer your vehicle using TOD registration. You can transfer ownership of a car, truck, motorcycle, boat or airplane in these states. Your beneficiary must take a certified death certificate, the vehicle’s title showing the TOD registration and picture identification to the appropriate agency to transfer title. If a loan remains on the vehicle, the TOD beneficiary becomes responsible for making the payments.
TOD Real Estate Deeds
The 18 states that allow you to transfer your real estate via TOD are Arizona, Arkansas, Colorado, Hawaii, Illinois, Indiana, Kansas, Missouri, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Dakota, Ohio, Oregon, Oklahoma and Wisconsin. The transferring document is commonly known as a TOD deed or a beneficiary deed. To transfer real estate outside of probate, you must retitle the deed as a TOD with the beneficiary listed on the title. The deed is recorded in the public records in the county where the property is located. Upon your death, property ownership is automatically transferred to the named beneficiary.
TOD Bank Accounts
No matter how much money you have in a bank account, you can use the TOD designation to keep the funds out of probate. TOD is used for checking and savings accounts, money market accounts and certificates of deposit. There’s no cost to add a TOD beneficiary, and the bank has all the forms you’ll need. Your beneficiary can usually receive the money instantly by providing a certified death certificate and photo identification after your death.
- Sanders and Associates, P.C.: Account Ownership -– Account Titling
- Uniform Law Commission: TOD Security Registration Act
- Nolo: How Transfer-on-Death Beneficiaries Can Claim Vehicles
- Non-Probate: Transfer on Death Deed
- Nolo: Payable-on-Death (POD) Accounts -- The Basics
- Pension Benefit Guarantee Corporation. "Designate a Beneficiary." Accessed July 8, 2020.
- Insurance Information Institute."What Is a Beneficiary?" Accessed July 8, 2020.
- United States Office of Personnel Management. "Life Insurance: Designating a Beneficiary." Accessed July 8, 2020.
- Securian Financial. "Naming a Life Insurance Beneficiary." Accessed July 8, 2020.
- Haven Life. "How to Name a Child as a Life Insurance Beneficiary." Accessed July 8, 2020.
- U.S. Department of Veterans Affairs. "Life Insurance: Designation of Beneficiaries Who Are Minors." Accessed July 8, 2020.
- Social Security Administration. "Types Of Beneficiaries." Accessed July 8, 2020.
- Fidelity. "Settling the Estate: Probate." Accessed July 8, 2020.
- United Way. "What Is a Beneficiary Designation?" Accessed July 8, 2020.
Based in St. Petersburg, Fla., Karen Rogers covers the financial markets for several online publications. She received a bachelor's degree in business administration from the University of South Florida.