TOD or transfer on death registration of securities allows an investor to arrange for transfer of securities upon the investor’s death without the necessity of having the securities go through probate. The executor or administrator of an estate does not have to take any action regarding specific securities that have TOD registration or even entire accounts that have been set up with TOD instructions.

Beneficiaries of TOD-registered securities have to re-register the securities in their own names in order to trade the securities. Re-registration normally requires sending a copy of the original securities holder’s death certificate to the transfer agent for the securities together with an application for re-registration. The company that issued the securities may act as its own transfer agent. If not, the company should be able to identify the transfer agent for the company’s securities. Liquidation of a TOD-registered account also requires sending a death certificate for the account holder and an application by the beneficiary to the institution holding the account.

Almost all states have adopted (with some modifications in some instances) the Uniform TOD Security Registration Act to govern how securities may be registered so that the securities pass upon the death of their owner to a designated beneficiary. The uniform act was first proposed for adoption by states in 1989. Objectives of the uniform act include encouraging and protecting intermediaries such as mutual funds, banks, and brokers who adopt procedures for TOD registration of securities owned by customers.

The process of TOD registration can be as simple as registering a security or an account in the name of the investor “TOD” the name of the beneficiary. The letters TOD indicate that the security or the account passes to the beneficiary upon the death of the investor. TOD securities or accounts remain under the control of the investor, and the investor retains the right to re-designate the beneficiary or to remove the TOD designation entirely.