|
Q.What is a Totten Trust?
A.A Totten Trust is merely a revocable transfer that passes to the beneficiary without probate upon the death of the donor. (Totten Trusts are assets of the account owner, not the beneficiary, for financial aid purposes.)
A totten trust, also known as an "In Trust For" account, guardian account, and Paid on Death account (POD), is not a typical trust.
A Totten Trust is a paid on death account that allows the account holder to designate one or more beneficiaries to receive the account assets. Immediately upon the account holder's death, the assets transfer to the named beneficiaries without probate.
For financial aid purposes, the assets held in a Totten Trust are treated as assets of the account owner, not the beneficiary. This is because the Totten Trust is a recovable transfer- so long as the account holder is alive, he or she may revoke the gift and change the names of the designated beneficiaries.
|
|
