THE MONEY SCHOOL

TOD/POD Checklist

Transfer on Death & Payable on Death designations help your assets avoid probate

Why TOD/POD Matters

Transfer on Death (TOD) and Payable on Death (POD) designations allow your assets to pass directly to your chosen beneficiaries without going through probate court.

Benefits: Faster transfer (weeks vs months), lower costs (no probate fees), and privacy (probate is public record).

What Accounts Can Use TOD/POD?

Bank Accounts (POD)

Payable on Death designations allow your bank accounts to transfer directly to beneficiaries without probate.

  • • Checking accounts
  • • Savings accounts
  • • Money market accounts
  • • Certificates of deposit (CDs)

Investment Accounts (TOD)

Transfer on Death designations work for most investment and brokerage accounts.

  • • Brokerage accounts
  • • Individual stocks and bonds
  • • Mutual funds
  • • ETFs and other securities

Retirement Accounts

These already have built-in beneficiary designations (similar to TOD/POD).

  • • 401(k) and 403(b) plans
  • • Traditional and Roth IRAs
  • • Pension plans
  • • Annuities

Real Estate (TOD Deed)

Some states allow Transfer on Death deeds for real estate. Check your state's laws.

  • • Primary residence
  • • Vacation homes
  • • Rental properties
  • • Land

⚠️ Not available in all states. Consult a real estate attorney.

Best Practices

Name Primary AND Contingent Beneficiaries⭐ Critical

If your primary beneficiary dies before you, the contingent (backup) beneficiary receives the assets.

Keep Beneficiary Designations Current⭐ Critical

Review and update beneficiaries after major life events: marriage, divorce, births, deaths.

Use Specific Percentages

Instead of 'split equally,' specify exact percentages (e.g., 50% each) to avoid confusion.

Coordinate with Your Will⭐ Critical

Beneficiary designations override your will. Make sure they align with your estate plan.

Consider Tax Implications

Consult a tax advisor about naming beneficiaries on retirement accounts to minimize taxes.

Keep Records

Give your executor a list of all accounts with TOD/POD designations and beneficiary names.

Be Specific with Minors⭐ Critical

If naming minor children, consider setting up a trust or designating a custodian under UTMA/UGMA.

Common Mistakes to Avoid

Forgetting to Update After Divorce

Mistake: Many people forget to remove ex-spouses as beneficiaries. In most states, beneficiary designations override divorce decrees.

Fix: Review all beneficiary designations immediately after divorce is final.

Naming Your Estate as Beneficiary

Mistake: This forces assets through probate, defeating the entire purpose of TOD/POD.

Fix: Always name specific individuals, not 'my estate' or 'my will.'

Not Naming Contingent Beneficiaries

Mistake: If your primary beneficiary dies first and there's no contingent, the assets go to your estate (probate).

Fix: Always name at least one backup beneficiary.

Unequal Treatment Without Explanation

Mistake: Designating different amounts to children can cause family disputes if the reasons aren't clear.

Fix: Document your reasoning in a letter to your executor or discuss with family.

How to Set Up TOD/POD

1.

Contact your financial institution. Most banks and brokerages have simple forms to add beneficiaries.

2.

Provide beneficiary information. Full legal names, Social Security numbers, birthdates, and relationships.

3.

Specify percentages. Decide how to divide assets among multiple beneficiaries.

4.

Name contingent beneficiaries. Always have a backup plan.

5.

Review annually. Life changes quickly—update beneficiaries after major events.

The Bottom Line

TOD and POD designations are one of the easiest and most effective estate planning tools. Setting them up takes 15 minutes per account and can save your heirs thousands in probate fees and months of waiting. Review your beneficiaries today.

Quick heads up: These calculators are designed to help you make smarter financial decisions, but they're meant for educational purposes only. Everyone's financial situation is unique, so consider this a helpful starting point rather than personalized financial advice. For decisions specific to your circumstances, it's always a good idea to consult with a qualified financial professional.