Will TOD accounts help to avoid probate?

As you go through the estate planning process, it’s likely that you want to try to avoid your assets going into probate after your death. One extremely popular way to do this is to create a transfer on death or TOD account. As a North Carolina inhabitant, it’s important to understand what TODs are so that you can determine whether or not they’re right for your estate planning process.

What is a transfer on death account?

A TOD is a special type of investment account that passes specific investment assets in the account directly to a beneficiary upon the account owner’s death. Since the transaction of the asset happens when the person dies, there is no need for the asset to go into the probate process. There are many different types of investment accounts that can be set up as TOD accounts. Some of the most popular include stocks, bonds, mutual funds and other investment accounts. For your beneficiary to claim ownership of the asset after your passing, they will need to supply an official death certificate to the investment company.

The various benefits of a TOD account

The main benefit of a TOD account is that it avoids the probate process. This can help to save money and time when passing down assets to your beneficiaries. TOD accounts can also be set up in a joint fashion. This would allow you to add multiple owners into the TOD account, such as all your children. Upon your passing, your share in the investment for the joint TOD account is equally shared between all the surviving owners of the account.

As you go to the estate planning process, there are many different types of accounts that you may want to set up. A transfer on death account can be a great option for those looking to instantly transfer investment assets after their passing. When creating this type of account, it’s a good idea to consult an attorney to ensure that your best interests are looked after.