Between TOD financial accounts and TOD deeds for real estate (in the states that allow them), many people leave little or nothing through probate or a will.
TOD Financial Accounts
A payable-on-death account is a bank or brokerage account with a designated beneficiary. Sometimes these are also called "Totten Trusts" or transfer-on-death accounts.
Whatever they're called, at the death of the account owner, the assets in the account are distributed to the person or people designated as account beneficiaries.
Usually, all that's required at the death of the account owner, is for the designated beneficiary to fill out a claim form and to supply a copy of the death certificate.
That's it.
If you're not sure whether or not an account had a designated beneficiary, you'll need to check with the bank or brokerage company and check on the account's registration.
For example, if Nila opened a checking account and then designated her brother, Jack, as the payable-on-death beneficiary, upon Nila's death, Jack will receive the account's assets.
Generated by Gemini, March 27, 2024
Minnesota Transfer on Death Deeds (TODD) for Avoiding Probate
While Minnesota doesn't recognize Lady Bird Deeds, they do have a similar and effective tool: Transfer on Death (TODD) Deeds. TODDs allow you to designate beneficiaries who inherit your property upon your death, bypassing probate.
Here's how TODDs work in Minnesota:
- Ownership During Life: You retain full control of the property during your lifetime. You can sell, mortgage, or even revoke the TODD at any point. Beneficiaries have no rights until your death.
- Transfer at Death: Upon your passing, the beneficiary receives ownership of the property by filing an affidavit and death certificate with the county recorder. This avoids probate.
Benefits of TODDs:
- Faster and Cheaper: Skipping probate saves time and money compared to the probate process.
- Flexibility: You can change beneficiaries or revoke the TODD anytime.
Resources:
- Minnesota Statute: The relevant statute for TODDs is Minnesota Statutes § 507.22 [MN Statute 507.22].
- TODD Form: You can find the official Minnesota TOD Deed form on the Minnesota Secretary of State's website: https://www.dhs.state.mn.us/main/idcplg?IdcService=GET_DYNAMIC_CONVERSION&RevisionSelectionMethod=LatestReleased&dDocName=SRU-020602
Additional Considerations:
- Legal Advice: While TODDs are relatively simple, consulting an attorney is recommended for complex situations or if you have other estate planning needs.
- Minor Beneficiaries: It's generally not advisable to designate minor beneficiaries as they can't manage property. You might consider a trust instead.