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Avoiding probate by using TOD accounts

On Behalf of | Jul 28, 2021 | Estate Planning |

Planning your estate should not feel overwhelming or impossible, even if you are new to the idea altogether. With a TOD account in the state of Illinois, it may be possible to skip the probate process when leaving assets, businesses, and properties to those in your will or those designated as probate beneficiaries.

What is a TOD account?

A TOD account, or transfer on death account, can be set up for the investments and assets of an individual that are transferred upon death. A TOD account can help expedite the transfer of funds, assets, and other items or properties that are included with the TOD account itself. It is easy to create a new TOD account by working together with your preferred investment company.

Advantages of using TOD accounts to avoid probate

Using TOD accounts when creating an estate plan is a way for you to ensure that your belongings, investments and assets are transferred properly after your death without a lengthy probate process. Without TOD accounts in place, probate is likely required and may take anywhere from a few months to more than a year from start to finish.

Potential risks of TOD accounts

Although TOD accounts are optimal to ease the transfer of assets, investments, and properties, there are also downsides for individuals who create TOD accounts while married without a prenuptial agreement in place. Any TOD account in an active marriage will be passed on to the surviving spouse, who may change beneficiaries at any time without warning and without additional approval.

Understanding the pros and cons of using TOD accounts can help you to better navigate the process of creating your own will and planning your estate. Legal counsel may explain everything you need to know about planning your estate as well as TOD accounts that may come in handy after your death.