Definition
A designation on a brokerage or bank account naming who receives it directly at your death, bypassing probate entirely. Like beneficiary designations on retirement accounts, a TOD overrides whatever your will says about that account.
Why it matters
TOD is free estate planning: one form moves an account to heirs in weeks instead of months of probate. The danger is forgetting it exists, because a stale designation beats a newer will every time.
Example
A widow adds a TOD naming her daughter on a $150,000 brokerage account. At her death the daughter claims it with a death certificate in a few weeks, no probate. Her neighbor's identical account, with no TOD, spends eight months in court first.
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.