In 1979, legislation was enacted that allowed the owner of a deposit account at any bank located within the State of Kansas to enter into a written contract with the bank to pay the proceeds of the account to one or more beneficiaries as designated by the owner. This agreement is commonly referred to as a "pay-on-death" designation.

In 1994, the pay-on-death concept was expanded to securities. The Uniform Transfer on Death Security Registration Act allows the owner of a security to have the name of a beneficiary placed on the certificate of the security. If the security is not represented by a certificate, then the designation is placed on the records of the transferring entity.

In 1997, legislation was passed that now allows a deed for real estate or a title to a motor vehicle to contain a beneficiary designation. As with the pay-on-death designation on a bank account or a beneficiary designation on a security, a transfer-on-death designation on a deed or motor vehicle title does not give the beneficiaries any interest in the property until the death of the owner.

The pay-on-death and transfer-on-death designations provide very good planning opportunities in some situations. However, care should be taken before using the designation as the sole method of estate planning as they may have unintended tax consequences.