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Totten Trust (Payable on Death Account)

Last updated 29th Nov 2022


The term Totten trust refers to a payable-on-death bank account that allows a beneficiary to inherit the money in the account when the owner passes away. Totten trusts do not need to go through probate, and since they do not meet the requirements to form a true trust or will, they are classified as testamentary substitutes.


Also referred to as payable-on-death accounts, a poor man's will, and revocable bank account trust, a Totten trust allows a bank account holder to designate a party that will inherit the funds in the account when the accountholder dies. Totten trusts derive their name from a New York Court of Appeals case (Matter of Totten) that established the legality of this process.

Totten trusts are created simply by filling out a form provided by a bank when creating a savings or checking account. This form provides the accountholder, or donor, with the option of designating a payable-on-death (POD) beneficiary. Once completed, the bank retains the form, which will act as a record of the account's beneficiary.

The advantage of a Totten trust is they avoid probate. The beneficiary can simply visit the bank and withdraw the funds from the account, typically after a relatively short waiting period. As long as the accountholder is alive, the beneficiary has no rights to the funds in the account and the accountholder is free to close or withdraw money at any time.

Related Terms

voting trust, trustee de son tort, qualified funeral trust, ex delicto trust

Moneyzine Editor

Moneyzine Editor