Aren’t I Covered by a ‘Transfer on Death’ Designation on My Accounts?

Not necessarily.  A trust is a better way to control who gets what when you pass away.  A ‘Transfer on Death’ (called a “TOD”) or a ‘Payable on Death’ (“POD”) designation on your checking, savings and brokerage accounts is a good idea if you do not have a trust but having a trust is an even better idea.  Why?  A trust has many more contingencies inherit in it than a TOD or POD can have.  Some do not allow for multiple beneficiaries by different percentages but even when they do, there may not be a provision for what happens if one of your beneficiaries dies before you do.  Grandchildren might be left out.  Or there might be a perception that one child got favored treatment and a bigger share of the estate by being the POD or TOD designee when others were not (or were on other accounts that lost value in comparison). This can be entirely avoided by having a trust, simply re-titling the account in the name of the trust, and have all the assets put in one big “pot” to be divided as you see fit.  Fluctuations in value won’t matter.  Grandchildren will inherit in place of a child if the child predeceases you.  And if you need someone else to manage your financial affairs while you are still living, your trust can provide for this.  A POD or TOD account designation won’t help with that but a trust, in combination with a Durable Power of Attorney for Financial Management, will.

Call the Law Offices of Ann Saponara today at 510-797-8902 to schedule a free consultation about foundational estate planning.