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What does TOD Mean?
by John Burnett, BOL Guru
Guru Bio

Question:  I had a customer present a check that had the letters "TOD" after the customerís name. The check was for income derived from a diversified bond fund. What do these letters stand for?

Answer:  They stand for "Transfer on Death." The legend designates the investment in the bond fund as one that will be transferred to a designated beneficiary on the death of the account owner. A similar abbreviation that is more familiar to bankers is "POD" for "Pay on Death." The TOD legend on the check does not create an interest in the check itself. For example, if the check reads "Pay to the order of Sam Smith, TOD Harriet Smith," Harriet is not a payee on the check and her endorsement is not required for negotiation.

First published on 6/04/07

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