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Q.What is a Totten Trust?

A.A totten trust, also known as an "In Trust For" account, guardian account, or Paid on Death (POD) account, is not a typical custodial account formed under the Uniform Transfer to Minors Act.

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.




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