If something happens to you, you may want a loved one or a friend to get immediate access to your bank accounts. This helps prevent that asset from being tied up in the probate process and allows that loved one the chance to use those funds much sooner. Especially if you want to help a spouse in the aftermath of your passing, this may lead you to think about the best ways to pass on these assets.
There are many different ways you can plan for the future of assets inside your estate, and payable on death and transfer on death designations are two options. These help avoid the requirement for an account to pass through probate on death and serve as an alternative to retitling assets into a revocable trust during the course of your life. Transfer on death designations are typically used with financial accounts and designate at least one beneficiary to be able to immediately receive the assets of the account upon death of the account holder.
This removes the requirement to go through the probate process in your state. The designated beneficiary instead presents documentation required by the institution as well as the death certificate and the proceeds are then distributed to that person. Careful consideration should be given to whether or not a payable on death or transfer on death designation is the right fit for your estate plan. While it is relatively easy, and remove some of the frustrations and concerns around probate, it is not the right fit for everyone.
Assets inside and account may still be subject to estate taxation and are typically not available to the estate for administration expenses or the payment of taxes. You’ll want to discuss any possible financial or other consequences with the Virginia Beach lawyer who assists you with the creation of your estate plan.