What is the purpose of a property transfer on death (TOD) designation?

A property transfer on death (TOD) designation is primarily designed to allow an individual to designate a beneficiary who will automatically receive the property upon the owner's death. This mechanism ensures that the transfer occurs outside of the probate process, which is often lengthy and costly. By using a TOD designation, the property can pass directly to the beneficiary without the need for court intervention, making the transfer more efficient and straightforward.

In this context, the other options fail to capture the primary function of a TOD. While facilitating property sales, establishing a trust, or ensuring debts are settled may involve different legal processes or purposes, they do not accurately reflect the specific role of a TOD designation. The key benefit of TOD is the avoidance of probate, which streamlines the transfer of assets to the designated beneficiary.