Trusts come in many forms. Some common trusts that you may want to discuss with your attorney include:
- Constructive trusts
- Special needs trusts
- Irrevocable trusts
- Revocable trusts
- Spendthrift trusts
- Tax bypass trusts
- Charitable trusts
- Asset protection trusts
- Pet trusts
- Totten trusts
Of these, a rare kind of trust is the totten trust. This, sometimes called a poor man’s trust or a payable on death account, is unique because of the ease of which it can be opened.
What is a totten trust?
Totten trusts are fairly rare trusts that people don’t always know about. They’re trusts that are established by opening a bank account on the behalf of a beneficiary. When the person who opened the account dies, the bank account’s funds are then transferred to the beneficiary directly.
Another name for a totten trust is a payable on death account. On the surface, this works like a normal bank account. Anyone who starts one can deposit or withdraw money. They can also close the account at any point.
Totten trusts do allow you to avoid probate, but you should be cautious. When you make deposits, it’s smart to do so in a way that names the beneficiary. For example, writing a check to deposit and including “for beneficiary: name” would be helpful. You should be careful to follow your bank’s rules if you want this kind of trus because you may need to fill out special paperwork prior to setting it up. This isn’t the most protective kind of trust, so if you’re looking to protect more than just money, you may want to ask your attorney about other trust options.