Payable on Death Accounts and Transfer on Death Accounts
June 29, 2012 By Law Office of Michael Robinson, P.C.
Payable on Death or Transfer on Death Accounts may be an option to avoid probate and allow your beneficiary immediate access to your accounts. Payable on Death Accounts are useful for bank accounts. They allow you to name a specific beneficiary so your loved one may have immediate access to your accounts upon your death.
This is an excellent way to maintain separate accounts from your spouse until you pass away. It’s also an easy solution to leaving a special inheritance to loved ones. You may leave a separate account to anyone you love such as your parents, godchild or sibling. Using this option will also help them avoid costs of probate.
Transfer on Death Accounts work in pretty much the same manner but are designed to transfer ownership of stocks, bonds and mutual funds.
Like a POD account, the TOD beneficiary has no right to the assets while you’re alive and upon your death, the assets are transferred to your named beneficiary, without being subject to probate.
Transfer on Death beneficiary can also be named for government securities, such as Treasury bills and notes and savings bonds. A custodian should be named if you wish to leave the security to a minor. Only one primary owner and one beneficiary can be named on these accounts.
These types of accounts are not as flexible as a will or trust. Usually you can’t name alternative beneficiaries to inherit the accounts if the first person named dies before you. These types of accounts have to be regularly updated. If no surviving beneficiaries are named, the account will go to your estate. The account could be subject to probate before it will be transferred to the person who inherits it.
It is always best to discuss any concerns regarding this type of issue with an estate planning attorney. An estate planning attorney will be happy to assist you with any preparations necessary in order to make the transition of your estate as easy as possible for your loved ones.
ABOUT THE AUTHOR: Michael Robinson
Experienced estate planning attorneys Naples NY of the Law Office of Michael Robinson P.C. offers estate planning and business planning resources to residents of Naples NY.
Copyright Law Office of Michael Robinson, P.C.
More information about Law Office of Michael Robinson, P.C.
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
Transfer on Death Accounts work in pretty much the same manner but are designed to transfer ownership of stocks, bonds and mutual funds.
Like a POD account, the TOD beneficiary has no right to the assets while you’re alive and upon your death, the assets are transferred to your named beneficiary, without being subject to probate.
Transfer on Death beneficiary can also be named for government securities, such as Treasury bills and notes and savings bonds. A custodian should be named if you wish to leave the security to a minor. Only one primary owner and one beneficiary can be named on these accounts.
These types of accounts are not as flexible as a will or trust. Usually you can’t name alternative beneficiaries to inherit the accounts if the first person named dies before you. These types of accounts have to be regularly updated. If no surviving beneficiaries are named, the account will go to your estate. The account could be subject to probate before it will be transferred to the person who inherits it.
It is always best to discuss any concerns regarding this type of issue with an estate planning attorney. An estate planning attorney will be happy to assist you with any preparations necessary in order to make the transition of your estate as easy as possible for your loved ones.
ABOUT THE AUTHOR: Michael Robinson
Experienced estate planning attorneys Naples NY of the Law Office of Michael Robinson P.C. offers estate planning and business planning resources to residents of Naples NY.
Copyright Law Office of Michael Robinson, P.C.
More information about Law Office of Michael Robinson, P.C.
View all articles published by Law Office of Michael Robinson, P.C.
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
