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How can you pass financial accounts to beneficiaries?

On Behalf of | Jul 17, 2024 | Estate Planning

Many people who are setting up an estate plan know that their will and trusts are the ways to pass assets to their beneficiaries. While that’s what’s necessary for many, it’s not the only option for financial accounts. 

When you open a bank account, you have the option of filling out a transfer on death designation. This allows someone to access the funds in your account after you die. It’s also known as a Totten trust

Important considerations

There are a few important things to remember about Totten trusts. One is that it can be changed when you feel necessary. All you have to do is fill out a new designation form and make sure the new one is on file with the bank. 

Another consideration is that the person you designate can’t access the contents of the account until you pass away. They have to provide their photo identification and their death certificate to get the account. 

Finally, the accounts that are covered by a Totten trust are not included in the rest of the estate plan. They won’t have to go through probate, so your beneficiaries will be able to have a private transfer of the funds and it will likely occur faster than if they had to go through probate.

All adults must have a comprehensive estate plan in place. This should include your wishes for what happens if you become incapacitated and how you want things to be handled after you die. Someone familiar with estate planning can assist you with getting everything set.