ASK KIM
Transfer-on-Death Designation Avoids Hassles
by Kimberly Lankford

My mother's brokerage account currently names me, her sole heir, as her transfer-on-death beneficiary. Would it be better if she made me a joint tenant with right of survivorship instead?

No. The transfer-on-death designation means you will get the assets in your mother's brokerage account at her death, without the delay, hassle and cost of probate.

Assuming that is her goal, the TOD designation works just like a joint tenancy with the right of survivorship.

If your mother names you a joint owner, however, she gives you the right to access the funds during her lifetime. And in most states, if you use funds for your benefit, the amount is considered a gift from your mother to you and could be subject to the federal gift tax. In addition, having you as a joint owner would put her account at risk from your creditors.