October 11, 2013

Dealing with the death of a loved one is an emotionally draining and challenging process - and struggling with the probate process doesn't often make the time easier for your surviving heirs. Recently I've been working with my clients to help make the transfer of assets upon their death much easier and more efficient for their heirs.

IRAs and 401(k)s are easy. Chances are you appointed beneficiaries on those accounts years ago, and hopefully you've updated them from time to time (marriage, divorce, birth of a child). Non-IRA, or what we call "non-qualified" accounts are a bit different - and adding a Transfer on Death, or TOD registration to an account will make life much easier for your heirs when the time comes.

Placing Transfer on Death instructions on an investment account is the equivalent of listing beneficiaries on your 401(k) or IRAs. It allows for assets or securities to pass directly to your beneficiaries, again avoiding the timely and often costly probate process. All that surviving heirs must do in most cases is provide a copy of the deceased's death certificate, and sign new account paperwork to transfer assets. During his/her lifetime, the TOD account owners have full ownership on all assets, can direct the purchase or sale of securities, and can take income from their investments.

Adding TOD to an account is a quick process, and costs nothing to place on an account. I've seen first-hand the ease of administration and transfer of TOD accounts to heirs, especially when compared to accounts that must first pass through probate before being distributed amongst surviving loved ones. If you'd like to learn more about leaving a legacy to loved ones, don't hesitate to ask.

Chuck Wade

(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).