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June 27, 2010

TOD Registration

Did you know that you can register your stock certificates in New York State in your name, to transfer on death to a named beneficiary? This is called TOD Registration. The acronym TOD stands for Transfer on Death. You may also hear the phrase POD, or, payable on death. Whether it's TOD or POD, any broker dealer which provides this type of account registration is giving you the option to pass your assets to your chosen beneficiaries outside of probate. Probate involves offering a will to a judge for approval of the terms, along with the attendant costs of opening and administering an Estate. With TOD or POD, there is no need for probate, because the contract with the securities broker requires it to transfer the asset to, or sell and pay the proceeds to your named account beneficiary. This is a fantastic way to save probate costs. But remember, everyone should have a will as a backup device, to catch any assets that would otherwise fall to intestacy due to mistakes in funding or setting up a TOD or trust account.