Securities Registered as I/T/F

Securities Registered as I/T/F

In 1990, states began enacting a new law allowing I/T/F accounts for securities. These can include stocks, bonds, mutual funds and other similar investments. Now an estate with cash and securities can pass on death with no need for court proceedings.

To set up your securities to transfer automatically on death, you need to have them correctly registered. If you use a brokerage account, the brokerage company should have a form for you to do this.

If your state has not passed this law, you may be able to benefit from it by moving your securities account to a firm in a state that has passed this law. Check with different stockbrokers and mutual fund companies to see if they allow you to set up your account to transfer on death.

If your securities are registered in your own name or with your spouse, you need to reregister them in TOD format with the designation of your beneficiary. The following are examples of how it is done in many states. Check with your mutual fund or stockbroker for the proper way in your state.

Example 1: Sole owner with sole beneficiary.

John S. Brown TOD John S. Brown Jr.

Example 2: Multiple owners with sole beneficiary.

John and Mary are joint tenants with right of survivorship, and when they die, John Jr. inherits the property.

John S. Brown Mary B. Brown JT TEN TOD

John S. Brown Jr.

Example 3: Multiple owners—substituted beneficiary.

John and Mary are joint tenants with right of survivorship, and when they die, John Jr. inherits the property. If John predeceases them, then Peter inherits it.

John S. Brown Mary B. Brown JT TEN TOD

John S. Brown Jr. SUB BEN Peter Q. Brown

Example 4: Multiple owners—lineal descendants.

John and Mary are joint tenants with right of survivorship, and when they die, John Jr. inherits the property. If John predeceases them in death, then John Jr.'s lineal descendants inherit it.

John S. Brown Mary B. Brown JT TEN TOD

John S. Brown Jr. LDPS