A transfer on death designation allows beneficiaries to receive assets at the time an individual passes away rather than waiting for the entire estate to go through probate. This also lets the security or account holder specify the specific percentage of assets that every beneficiary will receive.
This is very helpful for an executor to distribute a person’s assets after the creator passes away. Transfer on death designations only apply to those assets that have a named beneficiary. In order to initiate a transfer on death, a brokerage has to have appropriate documents to verify that those assets can be transferred.
Retirement accounts, such as 401(k)s and IRAs are transfer on death. This means that an unmarried individual can choose anyone as a beneficiary whereas a married person’s spouse may have rights to some or all of a retirement account at the time the spouse passes away.
A surviving spouse generally has more withdrawal opportunities and flexibility than other beneficiaries do. The uniform transfer on death securities registration act governs these transfers. This allows owners to name beneficiaries for bonds, stocks and brokerage accounts which is similar to a payable on death bank account. Each individual brokerage firm would need to have their own paperwork filed for this purpose.
Bear in mind that not all accounts will automatically default to transfer on death. As a result, you need to work with an estate planning lawyer to ensure you’ve covered all your assets in a transfer plan. Tools like a trust and will can help you achieve the right balance for your estate.
Work with our NH and ME estate planning lawyers today.