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Canton Estate Planning & Probate Lawyer > Blog > Estate Planning > Is A Connecticut TOD Account Right For You?

Is A Connecticut TOD Account Right For You?


If a revocable trust seems too complicated or expensive to consider for transfer of assets, but you still want to avoid Connecticut probate administration, is there another alternative? You’ve heard about transfer on death (TOD) and payable on death (POD) accounts, but are these accounts only useful for the transfer of bank account proceeds? In Connecticut, a TOD and POD account are both valid, and may be used for multiple assets including bank accounts. Read on to learn more. 

What is a TOD Account?

TOD accounts are transferable on death accounts. The difference between TOD and POD accounts is what assets can be transferred. Connecticut TOD accounts may hold §401(k) investments, IRA, pension and other investment account revenue. TOD accounts also allow the grantor to name multiple beneficiaries and designate substitute beneficiaries. It is important to note that beneficiaries cannot receive any distributions until the death of the grantor. This is unlike irrevocable trusts or revocable trusts, which can specify distinct circumstances wherein a beneficiary can receive a distribution.

Assets placed in a TOD account are not subject to probate administration, saving both time and expenses for beneficiaries. TOD accounts also allow account owners to leave specific instructions for distribution of account proceeds. TOD accounts offer additional benefits and can be used for personal property such as vehicles, furnishings, a boat slip, etc. It cannot be used to transfer real property or land.

What about POD Accounts? 

POD accounts, or payable on death accounts, can only be utilized for bank and investment accounts, and other revenue. POD accounts are not valid for tangible personal property. To establish a POD account, the grantor must name a beneficiary to the contents of the account who is to be paid after the grantor’s death.  The grantor must be sure to mention the existence of a POD account in their will, including the named beneficiary, to prevent a will contest or dispute over bank account proceeds after their death. The grantor should also include a provision for a substitute beneficiary should their first beneficiary precede them in death. Keep in mind that the contents of a POD account will only be paid to a named beneficiary, so it is not only a viable option for grantors wishing to split their assets with multiple family members after their death. 

Contact Canton Estate Planning Attorney Brian Karpe  

Probate administration and estate planning are complicated matters of the law. There are so many different accounts to choose from, each offering different protections or benefits. If you have questions about your estate plan, or how to better prepare for the future, contact Canton estate planning attorney Brian S. Karpe. Mr. Karpe has an advanced legal degree in estate law and more than thirty years of experience helping clients just like you protect their assets and plan for the future. He serves clients throughout Canton and Central Connecticut.

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