Some people in Ohio who are making their estate plans may want to look into a Totten trust. This type of trust might be useful for someone who wishes to avoid making a will and wants to keep financial arrangements private from others.
A Totten trust is revocable. This means that the owner can change it at any time. In a Totten trust, a person opens a bank account and deposits money in it on behalf of the beneficiary. The beneficiary may not know about the existence of the account, and the owner is free to withdraw money or even close the account as desired. The account is transferred to the beneficiary either on the death of the owner or by some act of the owner such as giving the passbook to the beneficiary.
A Totten account does not necessarily protect assets from creditors. However, on the owner’s death, the funds will pass directly to the beneficiary and that part of the estate will avoid probate. Because it makes a will unnecessary, a Totten trust is also known as a testamentary substitute.
People who are preparing their estate planning documents may have a number of decisions to make amid a variety of particular circumstances. For example, a difficult family situation may mean a person simply wants to create a trust like a Totten account in order to quietly pass funds to an heir without others finding out about it. Trusts might be useful in other complicated situations as well. For example, they can place conditions on receiving assets that vary from waiting for minor beneficiaries to grow up to requiring certain milestones such as a college education. A family member might be irresponsible with money or have special needs that would make a trust useful. Estate plans should be regularly reviewed and updated, and an attorney can often provide assistance in this regard.