Totten Trust (POD Account)
A Totten trust is an informal revocable trust where a bank account passes directly to named beneficiaries upon death, avoiding probate while allowing full control during lifetime.
Get personalized explanations
💡
Exam Tip
Totten = POD = informal, revocable. Avoids probate but NO asset protection. FDIC: $250,000/beneficiary, max $1,250,000.
What is a Totten Trust?
A Totten trust (POD account) is the simplest trust arrangement - title a bank account "payable on death" to beneficiaries.
Key Features
| During Lifetime | At Death |
|---|---|
| Full access | Passes to beneficiaries |
| Can change beneficiaries | Avoids probate |
| Taxed as owner's income | Stepped-up basis |
FDIC Coverage (2025)
$250,000 per beneficiary, max $1,250,000.
Limitations
- No incapacity protection
- No asset protection
- Bank accounts only