A Totten trust is best described as a bank account in which:

A Totten trust is best described as a bank account in which:

• A. A bank account with a named beneficiary upon death
• B. A revocable living trust
• C. A will substitute that avoids probate
• D. A joint tenancy with right of survivorship

Answer: (A)

A Totten trust is a payable-on-death arrangement for a bank account. The depositor controls the funds during life, and upon death the balance is paid to a named beneficiary directly, outside probate. This makes the account function as a beneficiary designation rather than a separate trust document. It’s not a revocable living trust, which uses a formal trust instrument, nor is it joint tenancy with right of survivorship, where ownership passes to a co-owner. The defining feature is the bank account with a named beneficiary who receives the funds after death.

A Totten trust is a payable-on-death arrangement for a bank account. The depositor controls the funds during life, and upon death the balance is paid to a named beneficiary directly, outside probate. This makes the account function as a beneficiary designation rather than a separate trust document. It’s not a revocable living trust, which uses a formal trust instrument, nor is it joint tenancy with right of survivorship, where ownership passes to a co-owner. The defining feature is the bank account with a named beneficiary who receives the funds after death.