transfer on death

(redirected from Transfer on Death Accounts)

Transfer On Death (TOD)

The process of changing title of a security from one name to another upon the death of one of the titleholders.

Transfer on Death

A brokerage account into which the account holder places assets while maintaining control of them, with the proviso that the assets pass on to beneficiaries after the account holder's death. That is, the account holder maintains the ability to invest, profit from, or otherwise use the securities and other assets in the transfer-on-death account. The assets in the account pass on to the beneficiary following the death of the account holder. This helps the beneficiary avoid the sometimes lengthy probate process. However, because the account holder maintains the rights of ownership (though not ownership itself) the account is subject to the estate tax. See also: Totten trust.

transfer on death

A legal agreement that, upon the death of its maker, passes ownership of certain assets to beneficiaries while bypassing probate. A transfer-on-death agreement generally results in assets passing with minimal delay and may result in reduced probate fees. Assets passed through this agreement remain subject to estate taxation.