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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.

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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 LifetimeAt Death
Full accessPasses to beneficiaries
Can change beneficiariesAvoids probate
Taxed as owner's incomeStepped-up basis

FDIC Coverage (2025)

$250,000 per beneficiary, max $1,250,000.

Limitations

  • No incapacity protection
  • No asset protection
  • Bank accounts only

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Related Terms

Probate

Probate is the legal process through which a deceased person's will is validated by a court, debts are paid, and remaining assets are distributed to beneficiaries, typically taking several months to over a year and involving court supervision.

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