An estate plan is a set of instructions that outlines who will receive which of your assets when you die. There are also other functions for the plan, but the transfer of assets is the primary purpose for most people.
One thing to remember is that some assets have transfer options that don’t include the estate plan. For example, a Totten trust is a specific tool that makes it easy to transfer financial accounts to a named individual.
What is a Totten trust?
A Totten trust is also known as a payable-on-death designation. This is usually established when you open a checking, savings or other similar type of account. Financial institutions usually have this form for people to fill out, and they have the document necessary to change the designation if that’s ever desired.
Establishing this type of trust doesn’t change how the account is used while you’re alive. The beneficiary can’t access the account until after you pass away, so you will continue to use it as normal until then.
What happens to assets in the Totten trust?
Assets in the Totten trust don’t go through probate. They don’t have to be named in the estate plan because the Totten trust documents govern what happens to them. It’s critical that all assets that aren’t named in the Totten trust are handled in the estate plan.
Working with someone who can assist with getting the full estate plan in order is beneficial. They can help you to understand the options that you have for transferring assets and other decisions you need to make as you get the comprehensive plan set up.