A comprehensive estate plan in New York might contain any number of specially-drafted instruments, including a will, trusts or powers of attorney. One planning tool that might help keep your heirs out of probate court is a transfer on death account. TOD accounts transfer assets automatically to a beneficiary who is named by the account holder. If a person had a TOD savings account with $50,000 in it and named his or her child as the beneficiary, the funds would transfer automatically to the child when the person dies.
TOD accounts might be established via a brokerage account with a provision that directs the assets to a named beneficiary on the death of the account holder. It is possible, and desirable, in many cases to name more than one beneficiary on a particular account. Parents could establish a TOD account with all three of their children named as beneficiaries, each to get a third of the account.
Many assets, like deeds to property and investment accounts, may be considered TOD assets, as the asset is automatically transferred when the owner dies. The beneficiaries do not have any rights or access to TOD assets while the owner is alive. Beneficiaries can be updated or changed to reflect the wishes of the owner.
The greatest benefit of TOD accounts is their simplicity. Because they operate outside of probate, they may be easier than wills and trusts for the transfer of assets. They also supersede the terms of the person’s will. An estate planning attorney in New York may be able to help people who are interested in TOD accounts or estate planning generally. An attorney might set up trusts or accounts with transfer on death provisions as part of an estate plan that meets the needs and goals of the client.