What is a Transfer on Death (TOD) account? 

A Transfer on Death (TOD) account allows an account owner to designate one or more beneficiaries who will receive the assets in the account upon the owner’s death, without those assets having to go through probate.

Does New York recognize TOD accounts?

Yes, New York allows the use of TOD registrations for certain assets. These are typically available for brokerage accounts, securities, and in some cases, other financial assets. New York's recognition of TOD accounts helps streamline the process of transferring assets upon death directly to the beneficiary named on the account.

Do TOD accounts bypass probate in New York?

Yes, TOD accounts bypass the probate process in New York. By designating a beneficiary directly on the account, the assets pass directly to that person upon the death of the account owner, without being subject to the probate process. This can simplify and speed up the transfer of assets, as well as maintain privacy regarding the financial details of the deceased.

Are there any restrictions or considerations to keep in mind with TOD accounts in New York?

While TOD accounts can help avoid probate for specific assets, they do not replace the need for a comprehensive estate plan. Other assets not designated as TOD will still go through probate. Furthermore, TOD accounts do not allow for detailed instructions on how the assets should be used or conditions that must be met before the beneficiary can access them. For more complex estate planning goals, other tools like trusts might be more appropriate.

What types of assets can be designated as TOD in New York?

In New York, typical assets that can be registered as TOD include stocks, bonds, brokerage accounts, and sometimes bank accounts. It’s important to consult with the financial institution holding the assets to understand their specific policies regarding TOD designations.

Is it advisable to use a TOD account as the sole method of estate planning?

No, relying solely on TOD accounts for estate planning is not advisable. While they offer a simple way to transfer assets directly to beneficiaries without probate, they do not provide the same level of control, protection, or comprehensiveness as a more diversified estate plan that includes a will and possibly trusts. Additionally, TOD accounts do not address issues like guardianship for minors, directives regarding healthcare, or other personal matters.

How can I set up a TOD account in New York?

To set up a TOD account, contact your brokerage firm, bank, or financial institution to inquire about the process. It typically involves filling out a form where you designate the beneficiary or beneficiaries. It's crucial to keep the designations up to date and to review them periodically or when major life events occur, such as marriage, divorce, or the birth of a child.

For further details on setting up TOD accounts and how they fit into an overall estate plan, consulting with a financial advisor or an estate planning attorney is recommended. They can provide personalized advice based on your specific financial and family circumstances.