Preparing for death can be a scary thought, but it’s a necessary step to save your family some stress as they grieve. One step to seriously consider is to create a will or a trust. Some people don’t have a trust or will due to not having enough assets to leave anyone, but there are still a staggering amount of men and women aged 45 and up that haven’t prepared a will.

A survey performed by caring.com displayed that only 40% of people have a will or a trust, and 66% of those are 65 or older. Confronting the step of drawing up a will is a heavy topic – it forces you to decide who deserves what property and assets when you pass. These decisions are tough and pressure-filled, and many people shy away from tough decisions hoping things will just work out. If you have valuable assets and decide to not create a trust or a will, your family members could end up in probate court fighting over who deserves what.

Is that the best route to take? Probably not, but there is another choice; a Transfer of Death account (TOD).

Transfer of Death accounts (TOD)

TOD accounts are a proper substitute if you don’t want to deal with the more complicated legalize of constructing a legalize. A TOD account will automatically transfer the assets of your choosing to the named beneficiary. For example, if you have a vacation home or investment account and name your daughter as the beneficiary, she would receive both upon your death.

TOD accounts give a lot of freedom as the account holder. You can name multiple beneficiaries and divide assets any way you please. Also, to provide you security of your assets, your recipients cannot access or obtain rights to your TOD account while you’re alive. One final point on TOD accounts; they take precedence over a will. Let’s say you procure a will that leaves your money and property to your wife, but also have a TOD account naming your child as the beneficiary, the child would receive what’s in the account.

TOD account are subject to Estate and inheritance taxes and laws that vary by state, be sure to contact your attorney if you have questions.