Can a testamentary trust be the beneficiary of a TOD investment account?

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Can a testamentary trust be the beneficiary of a TOD investment account?

If so, will it avoid probate? Is there a specific way to name the Testamentary Trust as beneficiary? Such as, “Trustee(s) or Successor Trustee(s) as provided in my last Will and Testament”.

Asked on November 21, 2011 under Estate Planning, Oklahoma

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

A testamentary trust can be the beneficiary of a transfer on death account (tod account). The purpose of the transfer on death account is to allow the person while alive to keep the asset designated on the account and eliminate the taxes that could result of the asset is transferred to the beneficiary of the account during the lifetime of the person who designates the asset as a transfer upon death.

However, having an transfer upon death account not specifically set forth in a living trust will not avoid the asset being subject to a probate if the Will establishes the asset as part of a testamentary trust.

The TOD asset can be placed in a testamentary trust specificed by one's Will. I suggest that you consult with a Wills and trust attorney for any further answers to your question.

 


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