When two individuals own an account jointly, they may both use the funds in the account for their own benefit. Their creditors may pursue the funds when the individuals accumulate debts, and the individuals may transfer their rights in the account to others. It is not uncommon for married New Yorkers to use these types of accounts with their spouses.
However, when both of the owners of such joint accounts die, questions can arise with regard to where the funds should be distributed. One way that individuals can transfer property and investments at the times of their deaths is through transfer on death devices. Certain financial tools can be designated transfer on death or TOD, as can certain holdings of property.
Transfer on death items do not go through probate. In fact, they are passed directly to their new owners without issue during the estate administration process. Sometimes called Totten trusts or payable on death accounts, TOD accounts and property can be effective tools for passing wealth to others without bearing the burden of probate. They must be set up in accordance with the legal and financial regulations of the jurisdictions where they are made and may be subject to review to ensure that they are properly executed.
This post is intended to introduce the specific legal topic of TOD accounts and property. The estate planning can require one to make many serious and often complex decisions. It is often valuable to have assistance and guidance when making such decisions.