Can my mother sign a transfer on death (TOD) form to eliminate probate?

Full question:

My mom is dying. She survives my Dad. She has some personal assets which are in her name. She has a will that dispenses monies from $1000 to $25000 to various people and leaves the remainder to myself and my brother. The total assets are less than then amount that would trigger estate tax. Should I have her sign a transfer on death (TOD) form to eliminate probate. If so, how to fund the people in will to avoid any tax (such as gift tax) ?

• Category: Wills and Estates
• Subcategory: Probate
• Date: 04/07/2025
• State: Florida

Answer:

A lifetime transfer of a gift by an individual may be excluded from the federal gift tax if it isn't worth more than $13,000 in 2009. As a result of the 2009 annual gift tax exclusion, any person can give any other person up to $13,000 before the gift is subject to federal gift taxes. Also, in 2009 a couple may together make a combined $26,000 gift for tax purposes before there is a gift tax. The lifetime gift tax exclusion remains at $1,000,000.

There are various methods used to transfer assets upon death outside the probate process. A transfer of death designation is one method used to transfer assets such as stocks outside the probate process. In most states, the TOD designation can be used to transfer individual stocks or bonds, an entire security account, or mutual fund accounts, but rules vary by state.

There are a number of ways to avoid Florida probate. One of the most common ways to avoid Florida probate are by having property funded in a revocable trust which passes the property to named beneficiaries, through transfer on death accounts, which automatically pass upon the death of the account holder to their named beneficiaries or by contract such as an annuity, 401k plan or insurance policy.

Many people use revocable living trusts as a way to limit the amount of property subject to probate. Revocable living trusts are often advertised as a way to avoid probate all together, but often they are coupled with a "pourover" will that disposes of any property not specifically named in the trust.

I am unable to provide legal or tax advice. I suggest you contact a local attorney who can review all the facts and documents involved.