What are Payable on Death (POD) and Transfer on Death (TOD) accounts?
In Illinois, an owner of a bank or security account may transfer the account to one or more beneficiaries upon his or her death by using a “payable on death” (“POD”) or “transfer on death” (“TOD”) designation. POD accounts may be used to transfer assets held in a bank, savings and loan, or credit union to a beneficiary, and are sometimes called “Totten trusts.” TOD registration is used exclusively for securities and investment accounts. At the owner’s death, the named beneficiary becomes the owner of the POD or TOD account without having to go through probate. POD and TOD accounts allow the owner to retain control over the entire account during the owner’s lifetime; the owner can cancel or change the beneficiary without notifying the beneficiary. A person can open a new POD or TOD account, or convert an existing account to a POD or TOD by contacting their banker, broker, or financial advisor for the proper forms.
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