A transfer on death (TOD) designation is a written instruction which directs, at the time of your passing, the distribution of your interest in specific property/security to the person or persons you choose. The designation takes effect at the time of your passing, meaning that during your lifetime, it can be amended and the person you designated does not have a vested interest in the asset until you pass away. 

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What a TOD designation does

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The primary benefit of using a TOD designation is to avoid the probate administration of that specific asset. Assets with TOD designations pass seamlessly to the beneficiaries designated in the TOD designation upon presentation of your death certification and proof of identification of the designated recipient. A TOD designation avoids the hassle of filing paperwork with your local county probate court and paying associated fees. 

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Where you can use a TOD designation 

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• BANK ACCOUNTS — These TOD designations are usually labeled as "payable on death" (POD) and can easily be set up with your financial institution. You will likely need to make an appointment and make sure that each account is managed.

• BROKERAGE & INVESTMENT ACCOUNTS — These accounts typically have a TOD designation on the account itself (beneficiary), but it's always worth confirming with your financial advisor or representative.

• REAL ESTATE — In Ohio, TOD Designation Affidavits are commonly used for real property, as they allow you to name a beneficiary to receive the asset at your passing while maintaining ownership during your life.

• VEHICLES — Ohio allows a TOD designation for titled vehicles that are paid off. You can manage this at your local title office. ​

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What a TOD designation does NOT do

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Having TOD designations in place does not mean you have a robust estate plan which fully protects your intentions. It is extremely important to note that any Last Will & Testament or Trust instructions related to assets that have TOD designations will NOT override the TOD designations. The TOD designations will always supersede any other instruction, including any subsequently executed Wills or Codicils. 

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There are other important planning considerations and caveats regarding TOD designations. Work with trusted legal counsel to ensure sound planning for your future. Book a consultation with KH Reed Law today.