BENEFICIARY: TODs & PODs

Posted on June 9, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By AI

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A POD (Payable on Death) or TOD (Transfer on Death) account is a type of bank account where the account owner names a beneficiary to receive the account assets when the owner dies.

Key points about these accounts include:

  • Beneficiaries can be anyone, including minors, non-U.S. citizens, and organizations.
  • The beneficiary needs to provide a certified copy of the deceased’s death certificate to the bank or brokerage firm.
  • The assets are transferred immediately upon the account owner’s death.

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BENEFICIARY DESIGNATIONS: Top 10 Tips for Medical Professionals

Pros

  • Probate avoidance: By sidestepping probate, POD and TOD accounts streamline the distribution of assets post-death, allowing beneficiaries to gain access to these funds with greater speed.
  • Simplicity: Setting up these accounts is generally straightforward, often requiring just the completion of a form at the bank or brokerage firm.
  • No additional cost: There’s usually no cost to establish these accounts, aligning with the needs of individuals seeking a cost-effective method of transferring assets.

Cons

  • Joint ownership complexity. When an account is jointly owned, the beneficiary of the account won’t receive the assets until the surviving owner(s) die. The same applies to accounts owned in states with tenancy by the entirety for married couples.
  • Naming alternative beneficiaries: These accounts do not allow for the nomination of alternative beneficiaries if the primary beneficiary or beneficiaries predecease the account owner. This could lead to the assets being subjected to probate if the primary beneficiary is no longer alive at the time of the account holder’s death.
  • Transfers only happen after death: These accounts stipulate that the person must pass away before the beneficiary can access the funds – a restriction that could prove troublesome if the beneficiary requires access to these assets during the account holder’s life or if the account owner becomes incapacitated during their lifetime.

ESTATE PLANNING: https://medicalexecutivepost.com/2025/03/23/estate-plans-when-physicians-should-review/

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BENEFICIARY DESIGNATIONS: Top 10 Tips for Medical Professionals

Posted on April 14, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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Beneficiary designations can provide a relatively easy way to transfer an account or insurance policy upon your death. However, if you’re not careful, missing or outdated beneficiary designations can easily cause your estate plan to go awry.

Where you can find them

Here’s a sampling of where you’ll find beneficiary designations:

  • Employer-sponsored retirement plans [401(k), 403(b), etc.]
  • IRAs
  • Life insurance policies
  • Annuities
  • Transfer-on-death (TOD) investment accounts
  • Pay-on-death (POD) bank accounts
  • Stock options and restricted stock
  • Executive deferred compensation plans
  • In several states, so-called “lady bird” deeds for real estate

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10 tips about beneficiary designations

Because beneficiary designations are so important, keep these things in mind in your estate planning:

  1. Remember to name beneficiaries. If you don’t name a beneficiary, one of the following could occur:
    • The account or policy may have to go through probate. This process often results in unnecessary delays, additional costs, and unfavorable income tax treatment.
    • The agreement that controls the account or policy may provide for “default” beneficiaries. This could be helpful, but it’s possible the default beneficiaries may not be whom you intended.
  2. Name both primary and contingent beneficiaries. It’s a good practice to name a “back up” or contingent beneficiary in case the primary beneficiary dies before you. Depending on your situation, you may have only a primary beneficiary. In that case, consider whether it may make sense to name a charity (or charities) as the contingent beneficiary.
  3. Update for life events. Review your beneficiary designations regularly and update them as needed based on major life events, such as births, deaths, marriages, and divorces.
  4. Read the instructions. Beneficiary designation forms are not all alike. Don’t just fill in names — be sure to read the form carefully. If necessary, you can draft your own customized beneficiary designation, but you should do this only with the guidance of an experienced attorney or tax advisor.
  5. Coordinate with your will and trust. Whenever you change your will or trust, be sure to talk with your attorney about your beneficiary designations. Because these designations operate independently of your other estate planning documents, it’s important to understand how the different parts of your plan work as a whole.
  6. Think twice before naming individual beneficiaries for particular assets. For example, you may establish three accounts of equal value initially and name a different child as beneficiary of each account. Over the years, the accounts may grow or be depleted unevenly, so the three children end up receiving different amounts — which is not what you originally intended.
  7. Avoid naming your estate as beneficiary. If you designate a beneficiary on your 401(k), for example, it won’t have to go through probate court to be distributed to the beneficiary. If you name your estate as beneficiary, the account will have to go through probate. For IRAs and qualified retirement plans, there may also be unfavorable income tax consequences.
  8. Use caution when naming a trust as beneficiary. Consult your attorney or CPA before naming a trust as beneficiary for IRAs, qualified retirement plans, or annuities. There are situations where it makes sense to name a trust — for example if:
    • Your beneficiaries are minor children
    • You’re in a second marriage
    • You want to control access to funds
  9. Be aware of tax consequences. Many assets that transfer by beneficiary designation come with special tax consequences. It’s helpful to work with an experienced tax advisor to help provide planning ideas for your particular situation.
  10. Use disclaimers when necessary — but be careful. Sometimes a beneficiary may actually want to decline (disclaim) assets on which they’re designated as beneficiary. Keep in mind that disclaimers involve complex legal and tax issues and require careful consultation with your attorney and CPA.

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TRANSFER ON DEATH: TOD Deeds

Posted on October 23, 2023 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

SPONSOR: http://www.MarcinkoAdvisors@msn.com

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What Is a Transfer on Death (TOD) Deed?

TOD deeds are legal documents that can be filed in local land records offices, and do not require the notice of the beneficiary, though it’s probably a good idea to inform them. Each state has its own requirements as to what the deed entails. TOD deeds are offered in 27 states (and D.C.).

These deeds are revocable once filed. Beneficiaries have no ownership claim to your property while you’re still alive. You maintain full control of the property, including responsibility for any mortgage debt, taxes, liens and the like. Once you pass away, the property will transfer to your named beneficiary, along with any debts attached to it.

CITE: https://www.r2library.com/Resource

Pros and Cons of a Transfer on Death Deed

Before signing a transfer on death deed, there are a few things to keep in mind.

Pros

  • You retain ownership while you’re still alive. Your beneficiary only takes over once you pass away; until then, you make all decisions about your property, and can even sell it if you choose. This makes a TOD deed a better choice than, say, adding someone as a joint owner on your property. (In that case, you would need their permission before selling, refinancing, mortgaging or even improving the home.)
  • It is revocable. If you choose to withdraw or revoke your transfer on death deed, you can do so at any time. You can also replace an existing TOD deed with a new one, if desired.
  • It’s simple. Establishing a transfer on death deed is easy. It just requires signing the document and filing with your county land records office. You don’t even need to let the beneficiary know you’ve done it. 
  • Anyone can be named you beneficiary. You can use a transfer on death deed to pass property to anyone when you die. This includes family members, friends, other loved ones or even charitable causes.

Cons

  • Joint ownership takes precedence. If the property is jointly owned with someone else, that ownership supersedes a TOD deed. The property will instead transfer to the other owner if you pass away. Once they also pass away, the TOD deed will go into effect (if still valid).
  • If your beneficiary dies first, your property goes to probate anyway. If you pass away along with or after your beneficiary, and don’t have a backup beneficiary named, your property will go through probate with the rest of your estate. 

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RISK MANAGEMENT: https://www.routledge.com/Risk-Management-Liability-Insurance-and-Asset-Protection-Strategies-for/Marcinko-Hetico/p/book/9781498725989

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