A tentative trust created when a depositor opens a bank account in their own name as trustee for another person. The depositor retains full control during life, can withdraw funds or revoke the arrangement, but at death any remaining funds pass directly to the named beneficiary outside probate. Also called a "payable on death" (POD) account.
A Totten trust is basically a bank account you control completely while alive, but that automatically goes to someone you name when you die. It's the original "payable on death" account—simple way to pass money without probate.
⏱ When you'll encounter this term
- Opening POD or ITF bank accounts
- Simple estate planning for bank accounts
- Avoiding probate for liquid assets
- Older estate planning documents or bank forms
"Dad set up his savings account as a Totten trust for me—the account said 'John Smith ITF [in trust for] Sarah Smith.' While he was alive, he had total control and could spend it all. When he died, I presented his death certificate and the bank transferred the remaining $50,000 directly to me—no probate needed."
⚖️ Compare: Totten Trust vs Formal Trust
Informal, bank account only. Free to set up. Fully revocable. Simple death transfer. No ongoing duties.
Formal document required. Legal fees to create. May be irrevocable. Complex terms possible. Ongoing trustee duties.
💡 Did you know?
Totten trusts are named after the 1904 New York case Matter of Totten, which established that these informal arrangements are valid. Though the term "Totten trust" is less common now, the concept lives on in POD (payable on death) and ITF (in trust for) bank accounts.