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Trust Bank Accounts

Trust Bank Accounts. Defined. Not a real trust; just an account at a bank, credit union, or other financial institution . “A in trust for B.” “A, trustee for B.” Other terms: Totten trust Savings account trust Tentative trust. Ownership during T’s lifetime.

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Trust Bank Accounts

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  1. Trust Bank Accounts

  2. Defined • Nota real trust; just an account at a bank, credit union, or other financial institution. • “A in trust for B.” • “A, trustee for B.” • Other terms: • Totten trust • Savings account trust • Tentative trust

  3. Ownership during T’s lifetime • Trustee (depositor) has all rights. • May withdraw without notice to or consent of B. • No split of title. • No imposition of duties. • If more than one trustee (depositor), they own in proportion to their net contributions.

  4. Ownership After T’s death • Beneficiaries have rights only after: • All trustees have died. • Beneficiary has survived all trustees.

  5. Potential Benefits • Avoid probate – money immediately available to beneficiary • Inexpensive • Depositor gives up no control • Effective to make small gifts in large estates

  6. Potential Disadvantages • No professional management • Low rate of return • No tax benefits • Confusing to clients • Use Pay on Death accounts instead

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