TOD/POD designations.

In plain English

TOD stands for 'transfer on death' and POD stands for 'payable on death'. They are beneficiary labels you add to an account, telling the bank or brokerage who should receive the money when you die. POD is the common term for bank accounts; TOD is the common term for investment accounts and, in some states, even cars or homes. The big advantage is that the account passes straight to the named person and skips probate, the court process that otherwise sorts out a deceased person's property. While you are alive you keep full control and can change the beneficiary anytime. Availability and rules vary by state and by institution.

01Why it matters

A POD or TOD beneficiary you name on the account overrides your will, so if the two disagree, the account label wins, which makes keeping these designations current just as important as updating your will.

02The math, step by step

Carlos adds his daughter as the POD beneficiary on his savings account. When he dies, she brings a death certificate and ID to the bank and the balance is paid directly to her within a few weeks, with no probate case and no waiting on the rest of the estate to settle.

03What this is NOT

04Receipts

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