What does Transfer on Death mean?

When doing your Estate Planning research, you might come across the term "Transfer on Death" - This is a type of beneficiary designation usually used for real estate or financial accounts. 

 

Some states allow for Transfer on Death Deeds for houses. Most states have Joint Tenancy laws instead, which is similar in that it provides a Transfer on Death, but it's only to the current co-owner. You're also able to include a beneficiary on retirement accounts, life insurance policies, and most financial accounts. This means the proceeds would go directly to the beneficiaries on these accounts. 

 

A Transfer on Death designation will supersede a beneficiary designation made in your Will. You also may not need to go through probate if most of your assets are Transfer on Death. However, there are other reasons your Estate may have to go through probate, for example: Outstanding debts to pay, appointing Guardians for children or pets, etc.)

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