Estate planning requires an intensive look at every area of your life. This helps to ensure that you have everything taken care of so it’s easy for your loved ones to follow the plan when you’re gone.
Passing down your assets is one of the important things you must consider when creating an estate plan. Trusts are one of the options you have for accomplishing this goal, and these resources vary greatly. For example, a Totten trust is an option that some people might not think about initially, but that can ultimately be very beneficial for many.
What does a Totten trust do?
The Totten trust is a very specific revocable trust used for financial accounts. It’s easy to set up because it only requires you to fill out a payable-on-death designation form, letting a financial institution know who gets the funds in the account when you die.
While the Totten trust passes down to the designated person, that individual won’t have access to the account until you pass away. This ensures that you get full use of the accounts without them being changed by anyone.
One of the good things about a Totten trust is that you can change it at will. This doesn’t require a significant undertaking. Instead, you can simply change the person named on the payable-on-death designation.
Remember, a Totten trust is only one part of a comprehensive estate plan. Other trusts might be beneficial, and a will can detail basic information. Powers of attorney designations give someone the ability to make decisions about your finances or health care in the event of capacity. These are only a few of the resources that you may want to consider as you’re crafting a comprehensive strategy to meet your needs.
