What does TOD mean in finance?

What does TOD mean in finance?

What does TOD mean in finance?

transfer on death
transfer on death (TOD) a provision of a brokerage account that allows the account’s assets to pass directly to an intended beneficiary; the equivalent of a beneficiary designation.

How does a TOD account work?

A transfer on death (TOD) account automatically transfers its assets to a named beneficiary when the holder dies For example, if you have a savings account with $100,000 in it and name your son as its beneficiary, that account would transfer to him upon your death.

Is a TOD account an IRA?

A transfer on death account is an investment account with a designated beneficiary that will receive ownership of the account upon the death of the current account owner. For example, 401(k) accounts and IRAs are automatically TOD accounts; when your plan is set up, you choose a beneficiary or beneficiaries.

Can you withdraw from a TOD account?

With no present interest the designated beneficiary cannot withdraw funds for his or her personal use during the account holder’s lifetime. Even if the designated beneficiary is also the agent under a durable power of attorney for the account holder, withdrawals must be solely for the account holder’s benefit.

What’s the difference between POD and TOD?

A POD account is very similar to a transfer-on-death (TOD) arrangement but deals with a person’s bank assets instead of their stocks, bonds, mutual funds, or other investment assets. 2 Both POD and TOD agreements offer quick means of dispersing assets, as both avoid the probate process, which can take several months.

How do I get a TOD?

Creating a Transfer on Death Deed A transfer on death deed requires the following information be filed with the Office of Recorder of Deeds in a notarized form: • The names and addresses of all owners of the property. The legal description of the property to be transferred. The people receiving the property.

What is the difference between POD and TOD?