Transfer on Death (TOD)

Transfer on Death (TOD) is a designation in estate planning that allows assets to be automatically transferred to a named beneficiary upon the owner’s death, bypassing the probate process. This arrangement is commonly used for financial accounts such as bank accounts, brokerage accounts, and securities, as well as for certain types of property like real estate, where permitted by state law.

With a TOD designation, the account or property owner retains full control and ownership of the asset during their lifetime. They can change or revoke the beneficiary designation at any time, and the beneficiary has no rights to the asset while the owner is alive. Upon the owner’s death, the asset is directly transferred to the designated beneficiary, avoiding delays and costs associated with probate.