A transfer on death investment account is a brokerage or securities account registered with a named beneficiary who automatically receives the assets when the owner dies. The account never passes through probate, making it an attractive estate planning option for anyone with investment accounts.
Legal Authority
Kansas permits this type of registration under the Uniform TOD Security Registration Act, K.S.A. 17-49a01 et seq. It can apply to several types of assets held with most financial institutions, including:
- Stocks
- Bonds
- Mutual funds
- Brokerage accounts
How a TOD Account Differs From a Will
A will directs how your property is distributed, but it must be admitted to probate before anything transfers. A TOD account bypasses that process entirely. The beneficiary designation on file with your brokerage firm controls who inherits the account, even if your will says something different. That is why the two documents need to work together rather than against each other.
During your lifetime, nothing about the account changes. You keep full ownership, buy and sell as you wish, and can update or remove the beneficiary at any time. The person you name has no access to the account and no rights to it until after your death.
Setting one up is simple. Contact your brokerage firm, ask for a TOD or beneficiary designation form, name your beneficiary, and return the signed form. No court approval is required, though it’s worth revisiting the designation any time your estate plan changes.
How Your Beneficiary Claims the Account
After the owner dies, the named beneficiary typically provides the brokerage firm with a certified death certificate and a completed claim form. Once the paperwork is processed, the firm re-registers the assets in the beneficiary’s name. In most cases, this happens within a few weeks. There is no court filing, no executor involvement for that asset, and no public record of the transfer.
Common Mistakes With TOD Investment Accounts
A TOD designation only works as intended when it is kept current and coordinated with the rest of your plan. Watch for these frequent missteps:
- Outdated beneficiaries: A former spouse or deceased relative left on the form can send assets to the wrong person or back into probate. This can lead to unintentionally disinheriting some of your grandchildren.
- No contingent beneficiary: If your primary beneficiary dies before you and no alternate is named, the account may end up in your probate estate.
- Naming a minor: Children under 18 cannot legally take control of investment assets, which can force a court-supervised conservatorship to manage the money on their behalf.
- Conflicts with your broader plan: A TOD designation that contradicts your will or trust can create confusion and disputes among family members.
Talk With Our Wichita Estate Planning Team
At Full Circle Estate Planning and Probate, LLC, our clients come first, not billable hours. Estate planning involves real families and real decisions, and we treat every conversation that way. We take the time to learn what you actually need and build a plan around your family, your assets, and your goals. Call 316-290-9534 or contact us online to schedule your free consultation and find out whether a TOD account belongs in your estate plan.
