Totten trust

Thesaurus

Noun

Totten trust - a savings account deposited by someone who makes themselves the trustee for a beneficiary and who controls it during their lifetime; afterward the balance is payable to the previously named beneficiarysavings account trust, savings bank trust, trust account, trustee accounttrust - something (as property) held by one party (the trustee) for the benefit of another (the beneficiary); "he is the beneficiary of a generous trust set up by his father"

Totten Trust

Related to Totten Trust: spendthrift trust

Totten Trust

An arrangement created by a person depositing his or her own money in his or her own name in a bank account for the benefit of another. A Totten trust is a tentative trust, revocable at will, until the depositor dies or completes the gift in his or her lifetime by some unequivocal act or declaration, such as delivery of the pass-book or notice to the beneficiary. If the depositor dies before the beneficiary without revocation or some resolute act or declaration of disaffirmance, the presumption arises that an absolute trust was created as to the balance on hand at the death of the depositor.

The beneficiary need not know about the arrangement, and the depositor is entitled to deposit and withdraw funds from the account as he or she deems fit. The depositor can even close out or revoke the account without obtaining the beneficiary's permission. When the depositor dies, any funds in the account automatically become the property of the beneficiary, but they might be subject to the claims of the decedent's creditors. Totten trusts are usually established to avoid the inconvenience of making a will and the expense and delay of probate and administration. Such an arrangement is known as a testamentary substitute, since a will is thereby obviated. Frequently such trusts are established because the depositor wants to conceal his or her financial situation from others.

Totten trust

Totten Trust

A trust into which the grantor places banking assets such as savings accounts and certificates of deposit while maintaining control of them. That is, the grantor maintains the ability to invest, profit from, or otherwise use the assets in the Totten trust. The assets in the Totten trust pass on to the beneficiary following the death of the grantor. However, because the grantor maintains the rights of ownership (though not ownership itself), the trust is subject to the estate tax.

Totten trust

A trust in which the assets are deposited for a beneficiary but the grantor has complete control of the trust, including the right to reclaim the assets. The assets pass to the beneficiary upon the death of the grantor but are taxed as part of the grantor's estate.

Totten trust

Related to Totten trust: spendthrift trust

noun

Synonyms for Totten trust

noun a savings account deposited by someone who makes themselves the trustee for a beneficiary and who controls it during their lifetime

Synonyms

savings account trust
savings bank trust
trust account
trustee account

Related Words

trust