When someone dies with a will, dealing with Maryland probate courts may be necessary to transfer assets to beneficiaries. However, not every asset in the estate has to go through probate. Assets with transfer-on-death or TOD designations might be outside of a probate court’s jurisdiction. An expansive use of TOD designations could help beneficiaries avoid probate altogether.
How transfer-on-death accounts work
Naming one or more beneficiaries to a financial account makes it possible to transfer the ownership when the primary account holder dies. Savings, investment and brokerage accounts would be among those assets where someone may name beneficiaries.
If the account holder lists more than one beneficiary, they share the proceeds. Sometimes, there isn’t a 50/50 split. For example, a brokerage account may allow percentage allocations, so one beneficiary may receive 60% while the other gets 40%.
The probate court does not rule over transfer-on-death accounts. During probate, the court looks at assets owned solely by the deceased and then reviews the will or intestate laws to determine who receives the property. With a TOD account, the beneficiary becomes the new owner once the primary passes away.
Joint accounts and TOD requirements
Joint accounts with rights of survivorship would go to the surviving account holder, and jointly owned property follows the same process. However, joint tenants without rights of survivorship would likely require probate.
Presenting a death certificate is necessary when executing the transfer-on-death process. Some accounts might require the beneficiary or joint account holder to fill out a transfer form. Overall, the process doesn’t require any complicated steps.
Effective estate planning could review the feasibility of maximizing TOD options. When creating an estate plan, an individual could also look at other matters, such as naming an executor to deal with additional responsibilities besides transferring assets.