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Several types of financial assets can be transferred directly to another person at death, without using a will or living trust.

The advantage of a direct transfer is that these assets do not need to go through probate with a will, or be distributed by the trust. Most require simply signing a form indicating who the assets should go to.

This is different from registering a bank or brokerage account in more than one name, with the owners recognized as Joint Tenants with Right of Survivorship (JTWROS). In that case all owners have equal access to the account and the assets held there. If one or more of the owners die, the survivors will own the entire account.

On the other hand, direct transfer of assets is useful when you don’t want someone to have ownership of the property while you are alive, but would like the assets to go to them when you die.

Bank Accounts

To create a payable-on-death (POD) bank account, you’ll fill out a form provided by your bank and specify the person you wish to receive the money. When you die, they can go to the bank with proof of your death and personal identification to receive the money in your bank account.

In states that have an estate tax or inheritance tax, your beneficiary may also need to show proof that these taxes have been paid before the bank will release the money.

Brokerage Accounts

In most states, you are also able to transfer stocks, bonds and brokerage accounts to whomever you designate. For brokerage accounts, your broker can help you set up a transfer-on-death (TOD) account.

If you buy stocks or bonds directly from a company, contact the company’s transfer agent for help in registering your account for transfer-on-death designation. When you die, the beneficiary will need to provide proof of your death and personal identification to receive the securities.

Tip: Be sure to maintain an up-to-date list of your bank and brokerage accounts with contact information so that the beneficiary knows where and how to claim their inheritance.

Retirement Accounts

You can name a beneficiary to receive the funds in your retirement accounts without going through probate. This is valid for both a company pension and an individual retirement account (IRA). You simply name the beneficiary for each retirement account. You may name more than one beneficiary for an account by indicating what percentage of the account each person should receive.

Real Estate

In at least ten states, you can transfer real estate through a transfer-on-death deed. The deed will state that it takes effect upon the death of the property owner. It must be prepared, signed and filed following the same procedure as for a regular deed.

Real estate may also be passed on to a survivor through joint ownership. However in this case, the joint owner has rights to the property before your death.

Vehicles

In a few states, you can register a motor vehicle with a transfer-on-death designation by filling out a beneficiary form. The name of your beneficiary will be listed on the vehicle registration. Check with your state’s department of motor vehicles to see whether this is currently an option for you.

If you financed the vehicle and still owe money to the dealership or a bank, this loan will also be passed on to the person receiving the vehicle.

Related Issues
Debts and other liabilities
Durable power of attorney for finances
Estate planning
Life insurance
Safe deposit box
Will or living trust