Ever wonder what is a Totten Trust? When you create this type of trust you are basically providing your bank with the name of the person who you want your bank account money to go to upon your death. Most banks have a simple form to fill out to create this type of trust. This type of trust is a revocable trust. Creating it will allow your money on deposit to not go through probate process and avoid probate fees. See California Probate Code Section 80, California Probate Code Sections 5404, 5406, 5407.
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A Totten Trust California is created usually using a simple form provided by your bank. You as the depositor, or trustor, fill out the form and designate who you would like to receive your money on deposit at the time of your death. This person is the beneficiary of the trust. This type of trust is a revocable trust that you can amend or revoke at any time you like.
What are the Benefits?
One of the main benefits to creating a Totten Trust is that you as the depositor maintain complete control over the money deposited in the bank account until your death. Instead of creating this trust you could just make the account a joint account that gives the person you want to leave the money to joint tenancy in the funds on deposit. The other person gets an immediate right to the money in your account, not just when you die. Creating a joint account will avoid probate too, but it also takes complete control of the money from you. Also this type of trust protects the money on deposit from the beneficiaries’ creditors while you the depositor are still alive. If you create a joint account the money on deposit is accessible to both your creditors and the creditors of the joint account holder. The person you want your bank account money to go to may not pay a credit card company or some other debt. If the creditor obtains a judgment then they can reach the money in the joint account.
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