Overview of 'Transfer on Death'

When planning your estate, you may encounter the term "Transfer on Death" (TOD). This guide breaks down what TOD means and how it can impact your estate planning process.

What does 'Transfer on Death' mean?

"Transfer on Death" is a beneficiary designation that applies to certain assets, such as real estate or financial accounts. This designation allows these assets to be transferred directly to a named beneficiary upon the death of the asset's owner, bypassing the traditional probate process.

Look up the requirements for the state the property is in. Many states have state-specific forms or language that must be used in order to be valid.

Learn more about Transfer on Death Deeds in our Learn Center: What is a Transfer on Death Deed & How Do I Use One? 

Does Trust & Will offer a Transfer on Death Deed?

No, we do not offer a TOD form as part of the Estate Plan. You can check with the county the property is in for state-specific documentation and filing requirements.

Transfer on Death Deeds for Real Estate

In some states, Transfer on Death Deeds are available for real estate properties. This option enables homeowners to name a beneficiary who will receive the property upon the homeowner's death without the need for probate.

Joint Tenancy Laws

Alternatively, most states offer Joint Tenancy laws, providing a similar "Transfer on Death" effect but limited to the current co-owner. Upon the death of one owner, the property automatically transfers to the surviving co-owner.

Learn more about Joint Tenancy in our Learn Center: Everything You Need to Know About Joint Tenancy

Beneficiaries on Financial Accounts

It's common to designate 'Transfer on Death' beneficiaries on retirement accounts, life insurance policies, and most financial accounts. This designation ensures that the assets in these accounts transfer directly to the beneficiaries, avoiding the probate process.

Impact on Wills and Probate

A key point to remember is that a Transfer on Death designation overrides any beneficiary designations made in your Will. In many cases, having assets designated as TOD can eliminate the need for those assets to go through probate. However, certain situations, such as the need to pay outstanding debts or appoint guardians for dependents, may still require probate.

 

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