September Topic Of The Month: Planning For Your Future: Transfer On Death Accounts

Kevin Orsinger |

When you’re told to plan for your future, you might think that includes establishing a will, contributing to retirement accounts, building your savings, or perhaps starting a college fund. But does a Transfer on death (TOD) account cross your mind? In many cases, these accounts aren’t the first thought. However, they can be immensely important because they transfer money upon the account holder’s death. Thus, assets are transferred almost immediately, ensuring that your beneficiaries are taken care of rapidly.

Essentially, a TOD account automatically transfers its assets to the beneficiary when the account holder passes away. Laws for TOD accounts vary from state to state, but many different bank accounts, investment accounts, and deeds can be considered TOD accounts. These accounts can have multiple beneficiaries and the assets can be divided in any way the account holder chooses and beneficiaries would have no access to those funds prior the account holder’s death.

TOD accounts are especially helpful because they skip the probate process. They also supersede wills, meaning that a beneficiary listed in a TOD account would be granted that asset over someone named in a will. Thus, it’s important to make sure your documents are contiguous, and any changes you make to your TOD accounts and will match. There are plenty of nuances with TOD accounts that vary situationally, so it’s best to discuss your account with your financial advisor to determine how you and your beneficiaries might benefit from a TOD account. Call Orsinger Investment Group, Inc. at (724)588-9067 to discuss how TOD accounts can factor into your estate planning.