How Registering Entities Set the Rules
Each financial institution that offers TOD registration gets to decide the specifics. The steps for naming, changing, or canceling a TOD beneficiary can vary by institution.
The law gives them room to create terms that fit their operations. The protections in this article still apply regardless.
A registering entity that offers to accept registrations in beneficiary form may establish the terms and conditions under which it will receive and implement these requests as well as requests for cancellation of previously registered transfer on death beneficiary designations and requests for reregistration to effect a change of beneficiary.
A.R.S. § 14-6310(A)For example, this covers how the institution verifies a death and how it handles fractional shares. It also covers how it processes changes to beneficiary forms during the owner's lifetime.
Per Stirpes Substitution and Registration Examples
One notable feature is the "LDPS" label. It stands for "lineal descendants per stirpes."
If you add this notation after a beneficiary's name, it creates a backup plan. If your named beneficiary dies before you, their share passes to their own descendants.
The registering entity may indicate a beneficiary substitution by appending to the name of the primary beneficiary the letters "LDPS" or the words "lineal descendants per stirpes". This designation substitutes a deceased beneficiary's descendants who survive the owner for a beneficiary who fails to survive.
A.R.S. § 14-6310(B)The statute also shows several examples of how TOD registrations look in practice. A sole owner naming one beneficiary might read: "John S Brown TOD John S Brown Jr."
Joint owners with a backup beneficiary might use a longer format with the LDPS notation. These examples give financial institutions a standard to follow.