Creating an estate plan is a critical task for adults. Doing so involves making certain decisions that will make it easier for your loved ones to take care of your affairs when you pass away.
Many assets can be handed down to your loved ones through your will and trusts. These both give you the opportunity to say whom you want to receive which assets. Among the assets that you have to plan for are your financial accounts.
Payable on death designations
When you open a new bank account, you may be asked whom you want to receive whatever is in your account when you pass away. This person will receive the payable on death designation for that account. This is also known as establishing a Totten trust.
A Totten trust is a revocable trust, which means that you can change it as you feel that it’s necessary. It’s as simple as going to the bank to fill out a new form.
When you set up a payable on death designation, the designee can access the account by providing your death certificate and their photo identification. They don’t have access to the account while you’re still living, so you can use the account as you see fit while you’re living.
A Totten trust is only one part of a comprehensive estate plan, and setting this and all of the other components up in a clear, legally valid and enforceable manner is critical, That’s just one reason why it’s wise to have experienced legal guidance when creating as well as when modifying your estate plan.