New York residents may be able to use a transfer-on-death (TOD) designation to transfer assets without the need to go through probate. Assets such as money in a bank or brokerage account could be eligible for such a designation. When the current owner dies, any property that has a TOD attached to it will automatically go to whoever is named as the beneficiary. If an item is owned jointly, an individual can use a TOD to transfer his or her share.
It is possible to have more than one beneficiary when creating a TOD account. Furthermore, the current owner of an asset can change the beneficiary as long as he or she is of sound mind. It is important to understand that the TOD trumps any language put into a will. Therefore, it is a good idea to review TOD designations regularly to ensure that an asset will go to the right person or entity.
It is also worth noting that a creditor may be able to make a claim against any property that has a TOD designation. A surviving spouse might also have the ability to claim an asset even if he or she is not named as the primary beneficiary of an asset. Minors shouldn’t be named as beneficiaries as they cannot legally hold assets on their own.
The use of a TOD designation could be an effective way for an individual to meet his or her estate planning goals. In many cases, it may be easier to transfer assets with a beneficiary designation as opposed to relying solely on a will. Individuals are encouraged to craft an estate plan with the help of an attorney or another professional. Legal counsel could help make sure that an estate plan is in accordance with state law.