Transfer on Death Designations in Georgia: What They Are and How They Work

One of the quieter revolutions in estate planning over the past few decades is the expansion of transfer on death designations — a category of legal mechanisms that allow assets to pass directly to named beneficiaries at the owner's death, bypassing probate entirely, without the complexity and cost of a trust. In Georgia, these designations are now available for several categories of assets, making them a practical planning tool for many families.

What a Transfer on Death Designation Is

A transfer on death designation is an instruction attached to an asset — an account, a security, or real property — that names a beneficiary to receive that asset automatically at the owner's death. During the owner's lifetime, the designation has no legal effect: the owner retains full ownership, full control, and the unrestricted right to change, add, or remove beneficiaries at any time. The beneficiary has no present interest in the asset and no rights over it while the owner lives.

When the owner dies, the asset passes directly to the named beneficiary — without probate, without court involvement, and without waiting for an estate to be administered. The beneficiary claims the asset by presenting a death certificate and any required affidavit or claim form to the relevant institution.

This non-probate transfer mechanism operates outside of and takes precedence over a will. A will that attempts to direct an asset that already has a TOD designation to a different person has no effect on that asset — the designation controls.

Financial Accounts: Payable on Death and TOD Registrations

For bank accounts, the transfer on death mechanism is most commonly called a payable on death (POD) designation. For brokerage and investment accounts, it is typically called a TOD registration. Both function the same way: the account owner designates one or more beneficiaries through a form provided by the financial institution, and the account passes to those beneficiaries at death.

Georgia banks and brokerages are generally protected when they follow properly executed beneficiary designations. The assets pass outside the estate and are not available to satisfy the decedent's probate creditors.

Setting up a POD or TOD designation on a financial account is usually straightforward — most institutions make the designation form available online or in branch. The account owner can designate primary and contingent beneficiaries, specify percentage shares if naming multiple beneficiaries, and update the designations as circumstances change.

Retirement Accounts and Life Insurance

Retirement accounts — IRAs, 401(k)s, 403(b)s, and similar plans — have their own beneficiary designation systems governed by federal law and plan documents. These designations function identically to TOD designations: the account passes directly to the named beneficiary at death, outside of probate. Life insurance proceeds similarly pass to named beneficiaries by contract.

These designations are among the most important in any estate plan, because they often represent the most valuable assets a person owns. An outdated beneficiary designation on a retirement account — naming an ex-spouse, a deceased parent, or simply the estate rather than a living individual — can produce unintended and sometimes catastrophic results.

Real Property: The Georgia TOD Deed

Effective July 1, 2024, Georgia law recognized the transfer on death deed for real property, governed by O.C.G.A. § 44-17-1 et seq. A TOD deed allows a property owner to name a beneficiary who will receive the real estate automatically at the owner's death, without probate. The owner retains full ownership, possession, and the right to sell, mortgage, or revoke the deed during their lifetime. The beneficiary acquires no interest in the property until the owner's death.

To be effective, a Georgia TOD deed must be signed by the property owner, notarized, and recorded with the clerk of the superior court in the county where the property is located before the owner's death. Recording is essential — an unrecorded TOD deed has no legal effect.

At the owner's death, the beneficiary claims the property by recording an affidavit of survivorship along with a certified copy of the death certificate. The transfer is immediate and private.

A TOD deed does not protect the property from the owner's creditors — Medicaid estate recovery and other creditor claims can still reach property transferred by a TOD deed if the estate has insufficient other assets. And unlike a trust, a TOD deed cannot impose conditions, create trusts for minor beneficiaries, or direct the trustee to stagger distributions. These limitations make it well-suited for straightforward situations and less appropriate for complex family circumstances.

The Importance of Keeping Designations Current

TOD and POD designations do not self-update. A beneficiary designation naming an ex-spouse remains effective after a divorce — unlike a will, which Georgia law automatically revokes as to the former spouse upon divorce, a TOD designation is governed by contract law and is not automatically revoked by a change in marital status. A beneficiary designation naming a person who predeceased the owner may result in no beneficiary receiving the asset, potentially pulling it into the probate estate. A designation naming minor children directly may require a court-supervised conservatorship to manage the inherited funds until the children reach adulthood.

Every significant life change — marriage, divorce, birth of a child, death of a named beneficiary, major changes in relationship — should trigger a review of all beneficiary designations across all accounts, policies, and deeds. This review is an essential part of maintaining a coordinated estate plan.