Transfer on Death
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Transfer on Death We have a club member setting up their trust. They are requesting to provide a Transfer on Death/TOD form to our club to protect heirs from probate. Is there a way that we can honor that? Linda Macdougall My club has honored TOD forms for about 10 years now. We had an attorney as a member and he drafted a form for us. We have 20 members and everyone has signed a form which I keep on file. This allows for the step up in basis and passes the asset without having to go through probate proceedings. Randy Purvis D & C Investment Club Sent from my iPhone > On Nov 5, 2024, at 11:24 AM, LINDA MACDOUGALL via bivio.com <user*28884800001@bivio.com> wrote: > > We have a club member setting up their trust. They are > requesting to provide a Transfer on Death/TOD form to our > club to protect heirs from probate. Is there a way that we > can honor that? > > Linda Macdougall Please review this with your attorney. Most states do not allow TOD for a partnership interest, only securities such as a brokerage account. MCL 700.6301 and following discuss TOD registration of securities. The distinction between securities in a brokerage account and securities in your investment club is that a TOD on your brokerage account transfers the ownership of those securities within it. A TOD on your investment club interest does not transfer shares of the stocks held by the club. The club still owns all of the investments, not the individual member. Generally, a partnership interest is not a security, although state law may define it differently. I'm not an attorney, but I don't think your TOD designations would stand if challenged by a potential heir. Ira Smilovitz My club has honored TOD forms for about 10 years now. We had an attorney as a member and he drafted a form for us. We have 20 members and everyone has signed a form which I keep on file. This allows for the step up in basis and passes the asset without having to go through probate proceedings. Is it possible for you to share your form? Our club has discussed this and we have signed some papers, but do not know how legal they are. Who in you club keeps the paperwork or any records of this. Diana Evans > On Nov 5, 2024, at 11:38 AM, Randy Purvis via bivio.com <user*37247600001@bivio.com> wrote: > > My club has honored TOD forms for about 10 years now. We had an attorney as a member and he drafted a form for us. We have 20 members and everyone has signed a form which I keep on file. This allows for the step up in basis and passes the asset without having to go through probate proceedings. > > Randy Purvis > D & C Investment Club > > Sent from my iPhone > >> On Nov 5, 2024, at 11:24 AM, LINDA MACDOUGALL via bivio.com <user*28884800001@bivio.com> wrote: >> >> We have a club member setting up their trust. They are >> requesting to provide a Transfer on Death/TOD form to our >> club to protect heirs from probate. Is there a way that we >> can honor that? >> >> Linda Macdougall Diana, Please consult a local attorney before you start with TOD forms. For the reason I noted above, they may not be binding in your state and disbursement of funds to the wrong beneficiary can create significant legal and financial problems for your club. Ira Smilovitz Is it possible for you to share your form? Our club has discussed this and we have signed some papers, but do not know how legal they are. Who in you club keeps the paperwork or any records of this. |
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