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Home / What Does Tod Stand for in Banking

What Does Tod Stand for in Banking

Many out of state (non Florida) family members end up litigating in Florida probates about TOD accounts

Billion$ in "TOD" Florida Bank Accounts

What does " TOD " mean on a bank account?  We have previously written about TOD accounts and Florida POD accounts . Now, let's update this important Florida probate topic by giving you a link to two important Florida statutes + also a 2105 Florida probate opinion you can read for free. Here is the link to previous Florida TOD commentary: https://www.pankauskilawfirm.com/blog/avoid-probate-in-west-palm-beach-through-trusts-life-insurance-and-other-non-probate-assets-learn-how/

Transfer on death typically means that the named individual on the bank account inherits it automatically, by operation of law , when the other co owner dies.  Securities such as stocks and bonds and interests in Florida LLCs may be the subject of transfer on death ownership.  Florida Transfer on Death Security Registration Act

Family members may be able to inherit from a TOD account if the account is really an estate account and not a true survivorship account which transfers on death
When is a TOD account a true survivorship account and when should it go to the family and the estate?

TOD Law in Florida

A 2015 Florida probate case about TOD accounts and pay on death accounts sheds like on these "will substitutes."  2015 Florida TOD Probate Case  When someone dies all his or her assets don't necessarily go to the same place!  And sometimes special bank accounts do not need to be probated.

The good news is that Florida has TOD laws and Pay On Death Statutes which you can read for free.  Florida Statutes on TOD and Pay on Death Accounts

Do not just assume the probate property is the extent of your relative's estate. Now more than ever, people are setting up bank accounts and investment accounts with a "designation of beneficiary" to transfer on death (TOD). The beneficiary is the person to whom the asset will transfer after the owner's death. TOD assets do offer several benefits most importantly these assets avoid the costly probate procedure. Upon death the assets will automatically be transferred to the designated beneficiaries and the personal representative of the estate will not have to take any other actions.

Importantly, since those stocks or funds do not go through probate issues may arise that will not catch a Personal Representative's attention. Here are some common examples where TOD's may haveunintended consequences:

  1. The next-of-kin or designated personal representative finds a recent bank statement or investment statement with substantial funds. One should remember, this is no guarantee that those funds will be going through the court probate process. That money may be paid directly to a beneficiary(someone who gets the assets), who may or may not be a beneficiary under the Will or an heir under the law.
  2. The thing to remember with TOD accounts is that often the family members themselves do not even know it was set up that way. Unless the name of the account actually includes a "TOD" reference, the bank is not going to disclose information to anyone except the owner or the beneficiary who presents a death certificate.
  3. A loving wife arranges for the funeral, sincerely believing that her husband's investment account is coming to her by probate or otherwise, she may learn too late that it was set up to pay on death to her husband's grown son or, even worse, to the husband's ex-wife because the husband forgot to change the designation of beneficiary when he was divorced!

Find about more about "TOD" assets and other aspects of probate administration through our video library. Visit http://www.pankauskilawfirm.com/ for more information!

What Does Tod Stand for in Banking

Source: https://www.pankauskilawfirm.com/blog/what-does-tod-mean-on-this-bank-statement/