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Simple English definitions for legal terms
transfer-on-death (TOD)
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A quick definition of transfer-on-death (TOD):
Transfer-on-Death (TOD) means that when someone dies, their things (like money, property, or stocks) can go directly to the person they named to receive them, without going through a long legal process called probate. This is done by filling out a special form called a transfer-on-death deed. The person who gets the things is called the beneficiary. They can be a person or a group, like a charity. The beneficiary can't get the things until the person who owned them dies. If the first beneficiary dies, someone else can be named to get the things instead. Some things, like stocks or property, can be transferred this way in some states.
A more thorough explanation:
Transfer-on-Death (TOD) is a way for property owners to name beneficiaries who will receive their assets after they die, without the need for probate. This makes it easier for the executor to distribute the assets to the beneficiaries.
For example, a person may use a transfer-on-death deed to name their child as the beneficiary of their home. When the person dies, the child will automatically become the owner of the home, without the need for probate.
The beneficiary of the TOD can be an individual or an organization, such as a charity. The property owner can also name alternate or successor beneficiaries in case the first beneficiary dies. However, the beneficiaries do not have access to the assets until the property owner dies.
The Uniform Transfer-on-Death Securities Registration Act allows owners to designate beneficiaries for their stock, bond, or brokerage accounts. Some states also allow vehicles and real estate to be transferred by TOD.
Overall, Transfer-on-Death is a useful tool for property owners to ensure that their assets are distributed according to their wishes, without the need for probate.