estate planning and elder law firm

What Is a TOD Beneficiary?

New Jersey Estate Planning Lawyer

Book an Initial Call
A person named as a transfer on death (TOD) beneficiary for an account will receive the assets held in it when the account owner dies.

What is a TOD beneficiary? It’s possible to name a TOD beneficiary for many account types—retirement accounts, savings accounts and even brokerage accounts. This can help you and your heirs avoid the sometimes costly process of probate. You can name anyone. However, if you’re married, your spouse may have special rights over your assets that take precedence over your named TOD beneficiaries.

Investopedia’s recent article entitled “Who Can Be a Transfer on Death (TOD) Beneficiary?” explains that the rules are quite broad when it comes to naming TOD beneficiaries. A TOD beneficiary can be a person, charity, business, or trust. Let’s look at whom you can name as a TOD beneficiary, and why you would.

Naming a transfer on death beneficiary for your accounts can make the inheritance process much simpler for your heirs and family. That’s because your named beneficiary will automatically get the assets in the account. Therefore, it bypasses probate.

The Uniform Transfer on Death Securities Registration Act lets owners designate beneficiaries for their stocks, bonds, or brokerage accounts.

You can also open a payable-on-death bank account to distribute cash assets after you pass away, without having to put them through probate.

In some states, even vehicles and real estate can be transferred in this manner.

A single person can name anyone as a beneficiary. However, a married person’s spouse may have rights to some or all of a retirement account upon death. A surviving spouse also may have more options for withdrawing money than other beneficiaries do. It depends on the rules that apply to each individual account.

You can also typically name as many beneficiaries as you like. You can use these to specify the percentage of assets that each designated beneficiary should get.

Note that with this registration, the named beneficiaries have no access to or control over a person’s assets when the person’s alive, so you retain total control over your assets until you pass away.

To discuss what is a TOD beneficiary, book a call with the Law Firm of Benjamin D. Eckman with offices in the Wayne, Union and Hackensack.

Reference: Investopedia (May 19, 2022) “Who Can Be a Transfer on Death (TOD) Beneficiary?”

Law Firm of Benjamin Eckman
Planning Today for Your Family's Tomorrow

1767 Morris Ave., Suite 314
Union, NJ 07083

By Appointment Only:

73 Mt. View Blvd., Wayne, NJ 07470
(973)709-0909

1 University Drive, Suite 609
Hackensack, NJ 07601

Contact Us
Union Office

1767 Morris Ave., Suite 314
Union, NJ 07083

Get Directions
Wayne Office

By Appointment Only:

73 Mt. View Blvd., Wayne, NJ 07470
(973)709-0909

Get Directions
Hackensack Office

1 University Drive, Suite 609
Hackensack, NJ 07601

Get Directions
Integrity Marketing Solutions - Estate Planning Marketing
Powered by
chevron-down