Transfer on death account (TOD)


A transfer on death account is a special type of investment account that is available in many states in the United States.

A TOD account allows for the assets remaining in the investment account when the account owner dies to pass to directly to the beneficiaries named by the account owner. It will happen outside of probate, and in general, all that the beneficiaries of the TOD account will have to do to gain control of the account after the owner dies is to show the holder of the investment account (usually a brokerage firm) an original death certificate of the owner.

The assets remaining in the TOD account will then be paid to the beneficiaries named by the account owner in the beneficiary designation form on file with the brokerage firm. It will happen even if the TOD account owner had a last will and testament or revocable living trust and regardless of what the will or trust says.

While the owner of the TOD account is alive, the beneficiaries named by the owner to receive the assets left in the account after the owner dies will not have any access to or control over the TOD account; only the owner will have access to and control over the assets held in the account. Also, the owner can change the beneficiaries of the TOD account at any time while the owner is living and competent to make changes to the account.

TOD accounts are easy to establish. To establish a TOD account, simply contact your investment company or bank and ask how to open a new TOD account or change your existing accounts into TOD accounts.