Estate planning isn’t something that most adults look forward to handling; however, it’s critical so they can ensure their assets and other wishes are handled according to what they want. Some individuals don’t realize that many estate plans are more than just a will.
One way that individuals can ensure their loved ones are taken care of is to establish trusts. A Totten trust is one type that’s important for the beneficiaries. This is a revocable trust, which means it can be changed as you feel necessary. It’s also known as a payable-on-death designation.
How are Totten trusts established?
A Totten trust is established when you start a bank account, including savings, checking and investment, and set up the designation that enables someone else to access the funds in your account after you pass away. This doesn’t give them the right or ability to get into your account while you’re still living, so you’re able to continue using the account as you wish.
Accounts that are covered by a Totten trust shouldn’t be included anywhere else in the estate plan. It’s a good idea to include information about the accounts in a letter of instruction so your loved ones know that the account is there and who should receive it.
Having a comprehensive estate plan in place is your opportunity to make your wishes known in a legally binding manner. Working with someone familiar with these matters is critical because they can help to ensure that you relay your wishes in an appropriate manner.