Administering a Transfer on Death Account

DEAN HANEWINCKEL | MONDAY, FEBRUARY 28, 2011 AT 06:43AM

Many brokerage firms and some banks offer payable on death (POD) or transfer on death(TOD) registration.  Using POD or TOD, an owner of an account can pass the securities or funds in the account directly to another person upon the owner’s death without having to go through probate.

At the owner’s death, the beneficiary designated by the TOD registration contracts the brokerage firm or bank, provides a death certificate and proof of his or her identity, and the account is transferred to his or her name.  The probate court is not involved.

Sometimes it is possible to determine whether a decedent had a POD or TOD account by receiving the most recent statement of the account.  You should find the part of the statement where an account owner is named.  Many firms will include TOD or POD after the owner’s name.  Some will even name the beneficiary.  This is not conclusive, however.  Even if the statement does not indicate a TOD registration, it still may exist.  You must contact the brokerage firm or fund managers to obtain this information.

It is important to realize that the firm may be unwilling to provide information if you are not the named beneficiary or the personal representative/executor of the decedent’s estate.  If this is the case, you should try to at least get them to tell you whether the account has a TOD registration or not.

If the account does have a TOD or POD registration and you are the named beneficiary, the brokerage firm or fund will have its own procedures for you to have the account transferred.  All of them will require the decedent’s death certificate and proof of your identity.

Sometimes after reading this post, you will have a better understanding of the succession process than the person at the bank or investment firm with whom you are dealing.

The person may tell you that you must provide “Letters of Administration,” “Letters Testamentary” or some other probate authorization even though the account is not subject to probate.  In those cases you will have to be patient and insistent.  You may have to speak to higher level manager or the institution’s legal staff.

If the account had a right of survivorship and you are a joint owner, if the account was titled into a revocable trust and you are the Successor Trustee, or if the account had a Transfer on Death or Payable on Death feature and you are the person designated to receive it upon the decedent’s death, you should only need evidence of the decedent’s death (a death certificate) and proof of your identity to deal with the transfer of the account.