TOTTEN TRUST Meaning and
Definition
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A Totten Trust, also known as a payable-on-death (POD) account or a revocable trust account, is a legal arrangement where an individual, often referred to as the settlor, creates a trust account and designates a beneficiary who will receive the assets upon the settlor's death. It is a flexible and easy-to-establish arrangement that allows the settlor to retain control over the assets during their lifetime and transfer the funds to the designated beneficiary without the need for probate proceedings.
The Totten Trust is typically set up at a financial institution, such as a bank or credit union, and can consist of various types of assets, such as cash, bank accounts, stocks, bonds, or certificates of deposit. The settlor retains the right to add or withdraw funds from the account and make changes to the beneficiary designation during their lifetime. The named beneficiary has no access or control over the assets until the settlor's death.
Upon the settlor's passing, the funds in the Totten Trust automatically transfer to the named beneficiary without going through the probate process. This offers a simplified and efficient means of passing assets to the intended recipient, bypassing the often time-consuming and costly probate proceedings.
It is important to note that a Totten Trust is revocable, meaning the settlor retains the ability to modify or even revoke the trust during their lifetime. This flexibility allows for changes in beneficiaries or asset distribution as circumstances evolve.
Common Misspellings for TOTTEN TRUST
- rotten trust
- fotten trust
- gotten trust
- yotten trust
- 6otten trust
- 5otten trust
- titten trust
- tktten trust
- tltten trust
- tptten trust
- t0tten trust
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- toften trust
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- totren trust
Etymology of TOTTEN TRUST
The term "Totten Trust" refers to a particular type of trust arrangement, also known as a "payable-on-death" account or "POD" account. However, it does not have a specific etymology itself. Instead, it is named after a court case from 1904 known as "In re Totten" or "Totten v. U.S". The name comes from the deceased person involved in the case, Charles D. Totten, whose trust arrangement became a legal precedent.
In the case, Charles Totten had created a bank account and named a beneficiary who would receive the funds after his death. The court ultimately ruled that this type of trust arrangement is valid and enforceable, even though it is not a formal trust according to traditional trust law.
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