Transfer on Death in New York: What Works, What Doesn't, and the Co-Op Problem

Transfer on Death — commonly called TOD — is one of the simplest and most effective ways to pass assets to beneficiaries without going through New York's Surrogate's Court. When done correctly, assets pass directly at death, with nothing more than a death certificate and an identification document required. There is no court filing, no executor involvement, no waiting period, and no fee.

But New York's TOD rules have limits that catch many families off guard. The most significant: New York does not have a Transfer on Death deed for real estate. If you own a home, condominium, or other real property in your name alone, TOD is not available for that asset, regardless of what other states may allow.

Here is a clear breakdown of what Transfer on Death covers in New York, what it does not cover, and how to structure your assets to minimize what has to go through the Surrogate's Court.

What Transfer on Death Covers in New York

Bank Accounts (Payable on Death)

New York bank accounts can be designated as Payable on Death (POD), also called Totten Trusts under New York law. The account owner retains full control during their lifetime — they can deposit, withdraw, and close the account at will. At death, the named beneficiary contacts the bank, presents a certified death certificate and their own identification, and the funds transfer immediately.

POD designations are set up directly with the bank and require no attorney, no court, and no Surrogate's Court involvement. The account never becomes part of the probate estate.

Multiple beneficiaries: Most banks allow you to name multiple POD beneficiaries who split the account equally, or in specific percentages you designate.

What happens if the beneficiary dies first: If the named beneficiary predeceases the account owner and no contingent beneficiary was named, the account becomes part of the probate estate at the account owner's death. Keep designations updated.

Brokerage and Investment Accounts (Transfer on Death)

Securities and investment accounts can carry Transfer on Death (TOD) registrations under New York law. The operation is identical to POD for bank accounts — the named beneficiary presents a death certificate and receives the account contents directly, without probate.

This applies to stocks, mutual funds, ETFs, and other securities held in a brokerage account. It does not apply to retirement accounts, which have their own separate beneficiary designation system.

Retirement Accounts (Separate Beneficiary Designation System)

IRAs, 401(k)s, 403(b)s, and similar retirement accounts pass via beneficiary designations maintained by the plan administrator — separate from TOD but functionally identical in that they bypass probate entirely. These are some of the most significant assets in most estates, and the designations should be verified regularly.

Retirement account beneficiary designations override any provision in the account owner's will. A will saying "I leave my 401(k) to my daughter" has no legal effect if the beneficiary designation on file with the plan administrator names someone else.

Life Insurance

Life insurance policies with named beneficiaries pass directly to those beneficiaries at death, outside of probate. The beneficiary files a claim with the insurer and receives payment directly. No court involvement.

Naming "estate" as the life insurance beneficiary routes the proceeds through probate and eliminates this benefit. Avoid it.

What Transfer on Death Does NOT Cover in New York

Real Estate

New York does not have a Transfer on Death deed statute for real property. This is a significant distinction from more than half of U.S. states, which allow property owners to record a deed that designates a beneficiary to receive real estate at death without probate.

In New York, if you own real property solely in your name, that property must go through the Surrogate's Court at your death, regardless of what your will says and regardless of how simple the estate otherwise is. The available alternatives for passing real estate outside probate in New York are:

1. Joint ownership with right of survivorship: Title the property jointly with the intended heir as "joint tenants with right of survivorship." The survivor automatically inherits at death, outside probate. This is an immediate gift of partial ownership, with property tax, gift tax, and creditor exposure implications.

2. Revocable living trust: Transfer title to a living trust. At death, the successor trustee distributes the property to beneficiaries without court involvement. This avoids the gift-in-lifetime problem of joint ownership.

3. Life estate deed: The owner retains a life estate (the right to use and live in the property until death) while transferring the remainder interest to the beneficiary now. At death, the property passes automatically. This has Medicaid and gift tax implications and is less flexible than a living trust.

None of these is as simple as a TOD deed, but they are the tools available in New York.

Cooperative Apartment Shares

The co-op situation in New York is complicated in ways that catch even sophisticated estate planners off guard.

Co-op shares are legally personal property — shares in a corporation, with a proprietary lease, not a real estate deed. So technically, they are not subject to the "no real estate TOD" rule. However, they cannot simply be designated with a TOD or POD designation the way a bank account can.

Ownership of co-op shares requires board approval for any transfer, including inheritance. Even if a will leaves co-op shares to a named beneficiary, or if a living trust attempts to transfer the shares, the co-op board must review and approve the transferee. Boards can reject proposed heirs without explanation.

Since 1996, New York law (EPTL § 6-2.2) has permitted married couples to hold co-op shares as tenants by the entirety, which provides both automatic survivorship rights and creditor protection. But this only applies to legally married spouses, and only to co-ops that the cooperative corporation consents to this form of holding.

For co-ops purchased before 1996, the default rule was tenancy in common — meaning each spouse's share went through probate at death rather than passing automatically to the survivor.

If a co-op constitutes a major part of an estate, the probate avoidance options are limited and the board approval process is unavoidable.

Checking and Updating Your Designations

Transfer on Death and Payable on Death designations are only effective if they are current. Situations that require reviewing and potentially updating all beneficiary designations:

• Marriage or remarriage
• Divorce (a former spouse may remain designated as beneficiary — designations do not automatically update when a marriage ends)
• Death of a named beneficiary
• Birth or adoption of a child
• Estrangement from or reconciliation with a family member
• Significant change in financial circumstances

The correct approach is to review every account — banking, brokerage, retirement, and life insurance — at each of these life events, and do a comprehensive annual review.

When TOD Is Not Enough

Transfer on Death designations are highly effective for financial accounts but leave gaps:

• Real property requires separate planning (joint ownership, trust, or life estate)
• Tangible personal property (furniture, artwork, jewelry, vehicles) does not have TOD designation options and may fall into the probate estate
• Business interests, partnership stakes, and complex investments typically require different structures

For many families, the right approach is a combination: TOD/POD designations on all financial accounts, beneficiary designations on all retirement accounts and life insurance, a living trust to hold real property, and a will to catch any assets that fall through the gaps and dictate their distribution.

The will in this context functions as a "catch-all" — it does not replace the TOD designations and beneficiary designations, but ensures that anything not covered by them ends up where the deceased person intended, albeit through probate.

The Interaction with the New York Estate Tax

Transfer on Death designations and non-probate assets avoid the Surrogate's Court but do not avoid the New York estate tax. For purposes of the New York estate tax, the taxable estate includes non-probate assets — retirement accounts, jointly held property, life insurance where the decedent held "incidents of ownership," and most TOD-designated accounts.

For 2026, the New York Basic Exclusion Amount is $7,350,000. Estates above this threshold owe estate tax. Estates above $7,717,500 (105% of the BEA) trigger the New York estate tax cliff, wiping out the entire exclusion. Effective probate avoidance planning does not substitute for estate tax planning if the estate is approaching these thresholds.

What Qualifies for Voluntary Administration Instead

If most of the estate consists of TOD/POD-designated accounts and the remaining probate assets are $50,000 or less in personal property (no solely owned real estate), the estate may qualify for New York's Voluntary Administration process — a $1.00 filing fee alternative to formal probate.

The EPTL § 5-3.1 family exemptions can further reduce the calculated probate estate: up to $25,000 in cash, a vehicle worth up to $25,000, and up to $20,000 in household goods are excluded from the threshold calculation for surviving spouses and minor children.

For a complete guide to how these tools work together — TOD designations, beneficiary designations, Voluntary Administration qualification, and the Surrogate's Court process for estates that require it — the New York Probate Process Guide covers the full landscape with practical worksheets and filing instructions.

See more New York guides →