The statute encourages and protects intermediaries who decide to offer a security or account registration form showing the owner's name and another designated as the owner's choice to become owner at the owner's death. Control of an investment registered in TOD beneficiary form, including the right to change or cancel the death beneficiary, lies solely with the owner and may be exercised via use of the intermediary's standard procedures for new registrations. As is so with securities registered in two names with right of survivorship, the transfer of ownership at an owner's death to a survivor designated in the title form results from the registration form and occurs outside the probate process and without reference to any will. The statute proposes nothing that is novel or untested. Beneficiary form registrations of U.S. Savings Bonds have been available under federal law for more than half a century.
Bank accounts and c.d.
Life insurance and retirement benefit accounts by-pass probate en route to death beneficiaries designated in controlling paperwork. Mutual funds have occasionally offered a trust form registration that, like bank accounts in the name of one as trustee for another, achieve the results of a TOD registration by use of language that is much less understandable as to its purpose. The statute enables avoidance of probate without the risk of problems caused by joint and survivor security titles that are especially hard on the elderly. A person, typically elderly and worried about the impact of high probate costs on family survivors, decides to add the name of a child to her own to create a joint tenancy with right of survivorship on a security or account title. The sole purpose is probate avoidance.