What is the difference between a Totten Trust account and a Pay-on-Death account?

With a payable on death account (POD account), you name a beneficiary who gets the account when you die. The person you name as beneficiary has no rights to the funds in the account during your lifetime. Until then, you can change the beneficiary.

A "Totten trust" or trust account is a trust account established by the styling of the account. By establishing a Totten trust account, the trustee holds the funds in the account for the benefit of the beneficiary. When the trustee dies (and no other person is named as successor trustee), the funds in the account will be provided to the beneficiary. Until that time, the beneficiary does not have access to the funds.

Although the effect at death is the same (that is, Hatch Bank will distribute the funds to the beneficiary), funds in a POD account are usually the assets of the primary account holder. Funds in a Totten trust account are held for the benefit of the beneficiary and usually are not included in the assets of the primary account holder.

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