Creating a comprehensive estate plan means that you have to ensure each asset you have is assigned to someone. Some people do this via a will, but others prefer to use trusts to accomplish this. One thing that you have to remember is that there are some assets that can be handled easily through a Totten trust.
A Totten trust is a special name for a payable on death designation for a financial account. These are often found on checking, savings, or investment accounts. Some retirement accounts may also have them.
How can you set up a Totten trust?
Setting up a Totten trust is simple. You just have to fill out the appropriate forms with the financial institution that has the accounts. The document enables you to retain control of the account until you pass away. The designated individual will be able to access the account after you pass away.
One important point to remember about this type of trust is that it doesn’t shield the account from creditors. This means that there might be claims made against the asset now or after you pass away. The upside to Totten trusts is that they don’t have to go through probate, so your loved ones will likely reap the benefits of it sooner than assets that do need to go through probate.
Remember that Totten trusts are only part of a comprehensive estate plan. You must ensure that you have other assets also covered in your estate plan. Ensuring you also have the arrangements made for your care if you become incapacitated is also important. Having it all together can help your loved ones to experience less stress if something does happen to you.