Brad Wiewel, whose Austin-based law firm specializes in estate planning and probate, recently tackled a controversial topic in his blog — “Is There A Mistress Or Paramour In Your Will?”
“Ok, even if that’s not your situation, this type of trust may be helpful and convenient for you. Totten Trusts are used quite frequently because they are an easy way to transfer money at death without going through probate. Also known as a “Payable-on-Death” (POD) bank account, it is designed so that you name a beneficiary to inherit the funds in the account after your death.
“Forbes recently published an article, ”Six Trusts For The Person Who Has Everything Else,” that highlights the Totten Trust as an easy step to take that can save your beneficiaries time and money by avoiding probate court. To create a Totten trust/POD account or to convert an existing savings or checking account into one, simply complete and return the bank paperwork and name the POD beneficiary. There, that’s it.
“The article says the Totten Trust’s name doesn’t come from the fact that they are established for tiny tots (though many are), but following a New York court case from 1904 (Matter of Totten) where this trust arrangement was first approved.
“While the depositor is still living, he or she has compete control of the account and can spend all of the funds and change beneficiaries however he or she may choose. The beneficiaries have no rights until the depositor dies. Forbes explains that a Totten trust can be “a useful way to keep otherwise ungrateful heirs in line, for fear of becoming former heirs.”
“So secret paramour or not, visit with your estate planning attorney and discuss how this trust and the others mentioned by Forbes might be helpful in your situation.”