What Does TOD Mean in Fidelity and How to Set It Up
Navigate Transfer on Death (TOD) for your Fidelity accounts. Secure direct asset transfer to beneficiaries, simplifying your estate planning process.
Transfer on Death (TOD) registration offers a streamlined method for transferring financial assets directly to designated beneficiaries upon an account holder’s passing. This approach helps simplify estate planning by allowing certain assets to bypass the often lengthy and public probate process.
Understanding Transfer on Death (TOD) Registration
Transfer on Death (TOD) registration functions as a non-probate transfer mechanism for investment and brokerage accounts. It allows assets held within these accounts to pass directly to named beneficiaries when the account holder dies, avoiding the court-supervised probate process. This direct transfer provides a quicker and more efficient distribution of assets, offering privacy as probate records are public. During the account holder’s lifetime, they retain full control over the assets, including the ability to manage investments, make withdrawals, or change beneficiaries.
While the concept is similar, TOD designations differ from Payable on Death (POD) designations and standard retirement account beneficiaries. POD designations are used for bank accounts, such as checking, savings, or certificates of deposit. In contrast, TOD specifically applies to investment instruments like stocks, bonds, mutual funds, and brokerage accounts. Retirement accounts, such as IRAs or 401(k)s, have their own beneficiary designation processes, which also bypass probate but operate under distinct rules.
Preparing for TOD Designation at Fidelity
Before initiating a Transfer on Death designation at Fidelity, account holders should gather specific information for each intended beneficiary. This includes their full legal name, current address, and Social Security Number or Taxpayer Identification Number. Additionally, the account holder must determine the precise percentage of assets each beneficiary will receive, ensuring the total allocation equals 100%. For minor beneficiaries, it is important to consider naming an adult custodian to manage the assets until the child reaches legal age.
Fidelity offers TOD registration for various non-retirement accounts, including individual brokerage accounts, joint tenancy with rights of survivorship accounts, and tenants by the entirety accounts. Accounts registered as tenants in common or community property are not eligible for TOD designations. Account holders can locate forms or online tools by logging into their Fidelity account and navigating to “Accounts & Trade,” then “Account Features,” and “Manage Beneficiaries,” or by searching Fidelity.com for “beneficiary” or “forms.” Ensure accuracy when completing forms, as discrepancies could delay the transfer process.
Completing and Maintaining Your Fidelity TOD
Once required information is gathered and TOD forms are completed, submit them to Fidelity. For physical forms, submission methods may include mailing the documents. Alternatively, many forms can be submitted digitally by uploading them through Fidelity’s secure online portal, often found at Fidelity.com/upload. All account owners must sign and date the forms to ensure their validity.
After submission, account holders can expect a confirmation from Fidelity that the designation has been received. Account holders can verify the successful application of their TOD designation by reviewing their account features online or by contacting Fidelity directly. It is important to regularly review and update TOD designations, especially after life events such as marriage, divorce, or the death of a beneficiary, to ensure the designations align with current wishes. Updates or changes to beneficiaries require submitting a new form or utilizing the online modification tools available through the Fidelity website, which will supersede any prior designations.