The transfer on death (TOD) account registration is a good way to establish beneficiaries on your non-retirement accounts. It ensures your assets are transferred to your chosen beneficiaries seamlessly, so your family may avoid the potentially costly, emotionally difficult, and drawn-out probate process.
Why Set Up a TOD Registered Account?
The TOD designation usually allows your family to bypass probate when distributing assets at your death. For instance, let’s say you have an individual brokerage account where you hold stocks and other securities, but you don’t have a TOD registration. When you pass away, those assets will likely move into probate, and legal parties will have to look to your last will and testament as a guide for how to distribute them. If the language in the will isn’t clear or there are questions, it could make an emotionally difficult time even more difficult for your heirs.
The TOD registration bypasses all of that. It takes precedence over anything stated in the will, so the assets will be distributed as you want and there won’t be any questions asked.