Have you named beneficiaries to your transfer on death accounts?

On behalf of Christopher Walker on Wednesday, July 10, 2019.

The idea of getting your final worldly affairs in order can be intimidating. You understand the importance of estate planning, but you may dread the idea of having to comb through every asset that you have and decide who gets what. Of course, this action is not exactly necessary for estate planning, and each person’s plan and the way that he or she plans is different.

If you do not yet feel ready to dive directly into getting the necessary forms, such as a power of attorney document or even a will, in place, you may want to start somewhere simpler. Your possible transfer on death accounts could be a wise starting point.

What is a TOD account?

Certain accounts allow the account holder to name beneficiaries to whom the assets will transfer in the event of the account holder’s death. This means that if you have a savings account that qualifies as TOD, you could utilize the beneficiary designation portion of your account information and name a person to receive the assets at the time of your passing. Other accounts that often qualify as TOD include insurance policies, investment accounts, bank accounts and some property deeds.

Why is a TOD account useful?

Naming beneficiaries to TOD accounts is fairly easy, which is why it may be a good way for you to get started with your estate planning journey. Having these accounts taken care of may spark your desire to get other affairs in order as well. Additionally, your TOD accounts do not have to go through the probate process. As a result, your named beneficiaries do not have to wait until that legal process is complete in order to obtain the assets in those accounts.

Is it really that easy?

In most cases, it is easy to set up your beneficiary designations for your TOD accounts and for your beneficiaries to receive the assets after your passing. However, complications could arise if you do not review and update your beneficiaries as necessary. If you name a person to a TOD account and that person passes before you, the account could have to go through probate in order to determine who receives the assets if you do not update the designation.

Still, you may have questions about TOD accounts, beneficiary designations and other aspects of starting your estate plan. Fortunately, you do not have to blindly walk into the process. You could obtain help from an experienced California estate planning attorney.