Q Can a transfer on death registration simplify passing on securities?
A Most investors have spent little time thinking about how their investment securities or investment accounts are registered or titled. Registration dictates the official ownership record of the investments. You may have stocks, for example, registered in your individual name or jointly with your spouse. It’s possible that you have investments for your minor child that are registered in your name or your spouse’s name as custodian for your child.
How your investment securities or accounts are registered is important in that it plays a role in where your money will go at your death. Lawyers advise individuals to establish wills, in part, to direct the manner in which assets will be distributed after death. Likewise, trusts are set up to protect assets and control where trust investments will go at some specific point in the future.
Few people are familiar with possibly the simplest way to pass on a security, mutual fund or CD to a designated beneficiary without suffering through the probate process.
This simple means of transfer at your death is accomplished through the transfer-on-death securities registration. The Uniform Transfer on Death Security Registration Act allows anyone to designate a beneficiary on a nonretirement account. In doing so, you guarantee that these assets will not go through probate. They pass directly to the beneficiaries.