What is a Totten Trust?

Totten trust 2

A Totten trust is the same thing as a payable-on-death account, a type of informal revocable trust in the form of a deposit account at a financial institution. When you pass away, a Totten trust allows a person you name as beneficiary to claim the money without a probate court proceeding.

You do not need an estate attorney to set one up; in fact, Totten trusts came into being as a way for people of modest means to leave money to a beneficiary without going through the expense of preparing a formal will. All a Totten trust requires is filling out a form at the credit union, specifying a beneficiary, and then signing the form. The credit union will keep the signed form on file.

While you’re alive, you won’t notice any difference between your Totten trust account and any other deposit account you have with Hanscom FCU.

Worried that your beneficiary will be able to drop by the credit union and withdraw funds without your knowing, or that you’ll lose your money if your beneficiary has to file bankruptcy or gets sued? No worries… that money is all yours to save (or spend) as you’d like while you’re alive. Your beneficiary has no rights to it until you’ve passed away. In fact, at any time you can change your beneficiary; that’s why it’s called a revocable trust. But keep in mind this also means the account is your asset, so it’s fair game in your divorce, bankruptcy, or collection action.

When you pass away, all your beneficiary has to do is show up at the credit union with a copy of your certified death certificate and their own government-issued photo id. The funds in the account will then be released to them.

You will need to let your loved one know that you’ve named them as a beneficiary of your Totten trust account held at Hanscom FCU because the credit union will not automatically inform them upon your passing.

If you’ve got individual share or share deposit accounts at Hanscom FCU, drop by and speak with one of our Member Service Representatives about putting a beneficiary on these accounts via a Totten trust.


Our Family Survivorship Guide will help steer you through some of the uncertainties around putting your loved one’s financial affairs in order. Some of the topics covered include settling accounts, documentation you'll need, how to establish an estate account, and more. Download your free copy here.

A Guide to Family Survivorship by Hanscom Federal Credit Union

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About Author

Diana Burrell
Diana Burrell

Diana Burrell is the marketing communications director at Hanscom FCU. She has a background in magazine journalism, as well as marketing, advertising, and public relations, and has authored over a dozen books. You can reach her at dburrell@hfcu.org.

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